Disability Insurance: An Important Consideration for Financial Stability

Today, many families are just a paycheck away from a financial catastrophe. Much emphasis is put on having life insurance to protect your family from the loss of your income if you were to pass away. But what if you are injured or become too ill to work? You need a backup plan to keep your family’s finances afloat, and this is where disability insurance can be an important part of financial planning for your family’s future.

Life Does Not Always Go as Planned
What if you were to become disabled from an injury or illness and could not work for weeks, months, or ever again? A work-related injury or illness may be covered through workers’ compensation insurance. However, when you become disabled from circumstances outside of the workplace, it is another story. Of course, there is Social Security Disability Insurance (SSDI), but it is difficult to qualify for, and it does not provide much in the way of income. Disability insurance can provide you and your family with an income that can help minimize the financial consequences of not being able to work.

Your Income is an Important Asset to Be Protected
To better understand why your income needs protection, you need to view it as an asset. Think for a moment; you protect your car and home with insurance. These are all assets that, if damaged or lost from an accident or a disaster, would need to be replaced; therefore, insuring them will provide you with the financial means to repair or replace them. The same is true for your income; it is one of your most important assets, aside from your family.

Where to Obtain Disability Insurance
Some employers may pay for or offer the option of short-term, long-term, or both types of disability insurance to their employees. These policies typically cover about 60 percent of their employees’ pre-tax salaries. That may not be enough to cover your expenses, especially if you are permanently disabled.

Personal disability coverage can pick up where employer plans leave off or if you change employment. With a personalized plan, you could purchase a policy that pays a higher benefit. You could also choose to have it the policy kick into force sooner instead of waiting to go through the typical elimination period. That alone can help reduce financial hardship from delaying the start of benefits.

Your family’s future depends on having a solid financial plan, and disability insurance should be a part of that plan. Flagler Financial can help you determine what coverage best fits in with your financial planning.