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Disability Insurance

Protect Your Income With Disability Insurance

You may use insurance to protect yourself and your family in many ways. For example, life insurance to take care of your family when you pass away, car insurance to protect your vehicle and homeowners’ insurance to protect against the loss of your home. One asset that is often forgotten is insuring your ability to work and earn a wage.


Disability insurance provides a way to ensure you will have an income for yourself and your family if you become ill or injured and are unable to work. The benefits are provided to you (the insured) tax-free when paid for with after-tax dollars. If you are a business owner, disability insurance can also be structured to provide the necessary business income to continue operations and payroll should you become disabled and unable to work. It does not, however, provide you a salary. You would need your own personal disability policy to complement the one structured for the business expenses.

DISABILITY INSURANCE OPTIONS There are several options you have when creating your customized disability policy. These options include:

1. Elimination Period: This is the period of time you must be disabled before you can begin to receive benefits. The shorter the elimination period, the more expensive the policy and vice versa.

2. Cost of Living Adjustment: This option increases the amount of your disability benefit by a specified percentage each year. This option is purchased to keep the payments in line with increases in the cost of goods over time. The higher the percentage increase selected, the more expensive the policy.

3. Future Purchase Option: This benefit allows you to purchase additional coverage at a later date without going through more medical exams.

4. Benefit Period: The benefit period is the length of time the disability payments will be made. This can range from a couple of years all the way to retirement age.

In addition to disability insurance options, an individual needs to understand the difference between “own occupation” and “any occupation” disability plans.

Own Occupation: If you can not perform your current job duties, you are considered disabled.

Any Occupation: You must be unable to perform ANY job for which you are qualified to do.

The Social Security definition of disability is any occupation, thus many individuals are initially denied. Disability insurance is an important tool to protect your working wage. Without disability insurance, you may be unable to pay your bills. If you are a business owner without a disability policy, you may be unable to keep your businesses running while you can’t work.