Protecting Yourself From Debt With Disability Insurance

If there is one maxim you should always consider in life, it's this: expect the unexpected. Yes, the fact is, things can go really well, or things can go really badly, and in some cases, the difference may just be that you planned for the worst, or you didn't. As an example, right now you may have a great job, be living below your means and everything is going really well. Feels good, doesn't it? Well what if you suddenly suffered from a debilitating illness. Certainly we don't mean to be grim about this, but things like this happen to hundreds of Americans everyday. And what if this illness means that you will have to miss work for a long time? Are you protected? Even with an emergency fund in place (three to six months wages in a bank account), a long term illness can be a killer for your credit. If the illness lasts a longer time than you expected, you may have to turn to credit card debt to finance your basic needs. Which can be ruinous. Fortunately, however, disability insurance can provide the protection you need to ensure you recover not only from your physical pain, but also from your financial pain.

With disability insurance, a portion of your regular income is paid to you if you are unable to work because of sickness or injury. The process works like this: once your disability or sickness occurs, an "elimination period" is enacted, during which you will not receive payments. This is common for all policies, and helps limit fraud. Once this period is complete, your policy will begin paying you. Your total payments are typically reliant on the amount of your premiums, as well as any riders you have attached to the disability insurance policy coverage.

Disability - What About The Short Term?

The sad truth about most disability insurance policies is that they do not often cover you for short term illnesses or injuries which mean you are out of work for shorter periods than the elimination period qualifies. Certainly, any time missed from work is a big deal, and costs you money, so there is another way. While certainly having the three to six months of emergency wages on hand just in case of such a situation is a great idea, another avenue you may want to consider is what is called short term disability insurance. With short term disability insurance, you will be paid a certain portion (usually up to 50% or more) of your regular weekly pay if you should become injured or sick enough that you must miss work. The downside of this insurance is that it only last for so long. Thus, having both disability and short term disability insurance in your financial safeguard portfolio can be a good thing, particularly if you are in an industry where injury happens commonly.

Fail To Plan And Plan To Fail

Hopefully, you are in great shape right now. And certainly we hope you continue to live well and retain your health. But we do warn that medical problems often have a way of creeping up on you - always at the most inopportune time. But you can be ready for this financially. Disability insurance provides that readiness, and ensures you come away from an illness in strong financial health as well.

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