What is disability insurance?
Disability insurance helps replace a major portion of your income when you are sick or injured and unable to work. Some people think of it as “paycheck protection.” Others view it as a way to protect their home since a mortgage payment is often a family’s most significant monthly expense.
Having disability insurance can provide a sense of security, knowing that if the unexpected should happen, you’ll still receive a monthly income.
If you think about it, everything you have today – your home, car, groceries, savings – basically your lifestyle, depends on your ability to earn an income. Most people are quick to insure their possessions, such as their home and car. And they generally have life insurance that would provide for their family. But the one thing that makes all this possible is – your income. It’s your most important asset. So, protecting it with disability insurance isn’t just a good decision – it’s essential.
Will I need disability insurance?
No one wants to think about becoming disabled. But the risk is real. What are the odds?
- An illness or accident will keep 1 in 5 workers out of work for at least a year before the age of 65
- Your chance of missing at least 90 days of work due to a disability is just under 1 in 32
- The risk of disability is greater than the risk of premature death
What would you do?
If a disabling sickness or injury happened to you today, how would you pay your bills? Would your savings cover your expenses for 60 to 90 days? That’s assuming the disability is short-term. What if it wasn’t?
Research conducted by the America’s Health Insurance Plan indicates that most Americans cannot afford to miss more than two months of work without having to borrow money. However, it wouldn’t be feasible to get approved for a loan without an income.
Think about how stressful it would be to cope with a disability. Having disability insurance would help relieve the added stress of losing your income.
Source: National Association of Insurance Commissioners (NAIC), Commissioner’s Individual Disability Table A (1985), Statistical Abstract of the United States, most current available.
What is Long-term Care Insurance?
Unlike traditional health insurance, long-term care insurance is designed to cover long-term services and supports, including personal and custodial care in a variety of settings such as your home, a community organization, or other facility.
Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating.You can select a range of care options and benefits that allow you to get the services you need, where you need them.
The cost of your long-term care policy is based on:
- How old you are when you buy the policy
- The maximum amount that a policy will pay per day
- The maximum number of days (years) that a policy will pay
- The maximum amount per day times the number of days determines the lifetime maximum amount that the policy will pay.
- Any optional benefits you choose, such as benefits that increase with inflation
If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance as most individual policies require medical underwriting. In some cases, you may be able to buy a limited amount of coverage, or coverage at a higher “non-standard” rate. Some group policies do not require underwriting.
“We trust PCH Benefits with our family’s insurance needs because we know they have our best interest in mind.”
Matt & Heather M.
GOOD TO KNOW
Many long-term care insurance policies have limits on how long or how much they will pay. Some policies will pay the costs of your long-term care for two to five years, while other insurance companies offer policies that will pay your long-term care costs for as long as you live – no matter how much it costs. But there are very few that have no such limits.