In Case of Emergency

Three in 10 people will need it, but many won’t have it. Do you?

  • By Jocelyn Black Hodes, DailyWorth's Resident Financial Advisor
  • July 11, 2013

Should I get group benefits?

Group disability insurance can be convenient and affordable, and in some cases free; however, there are tradeoffs. Your coverage will only last 90-180 days (unless you have signed up for long-term disability insurance). Your benefit is usually capped at $50,000. Your benefits will be taxable if your employer pays your premiums. And group benefits are not portable if you leave the company. 

Is it worth getting disability insurance if I can’t afford much?

When budgets are especially tight, it still makes sense to buy enough disability insurance to cover the rent or mortgage and keep your family in their home should you become disabled.  Individual disability insurance typically costs 1-4 percent of your income, depending on the extent of coverage, but can be more affordable. For example, a healthy 35-year-old can get an individual policy with a $1,000 monthly benefit for around $25 per month.

What does all this jargon mean? 

There are a lot of terms related to disability insurance that aren’t particularly easy to understand. The bottom line is: The more coverage, protection and flexibility in returning to work you want, the more expensive the policy will be. You can learn more about the jargon here

How do I know how much and what type of insurance is right for me?

There are a variety of calculators available online, including this one, but you should also consult a professional--either your company’s HR administrator and/or an experienced insurance agent--for clarification and confirmation. Ask for referrals and talk to two or three different insurance agents for comparison. To get an idea of cost, you can get a quick online quote here

How much does it matter which company I purchase the insurance from?

The company you choose to buy from is making a long-term commitment to you. If you become disabled, you may need benefits for many years, so it makes sense to buy from a company with experience, financial strength and a solid reputation. Rating companies like A.M. Best and Standard & Poor’s allow you to research an insurer’s credibility. 

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