Frequently Asked Question
Still More Questions? We've compiled our best answers here.
Disability insurance is essentially purchasing protection for your income. It steps in to help fill the gap when you are unable to do what you’re great at. It is typically paid out after a waiting period in monthly payments and will usually cover up to 60% of your gross income. This allows you to recover without drawing down and depleting your savings or depending on family and friends for emergency financial aid.
The answer to this question is surprisingly simple. Looking at the future, if your current and expected income are essential to making things happen for you and your family, then you likely need disability coverage. The best way to understand this is by looking disability as forced retirement – and ask yourself, can I afford to retire tomorrow? If the answer is no – then you should seriously consider disability insurance.
The cost increases with age. If you are in good health, you have a better chance of qualifying at a lower premium rate. If you need the insurance, there’s no better time than now.
The definition of disability varies depending on the plan. Our policies consider you disabled if you are unable to perform the duties of your own job due to sickness or accidental injury.
Generally, you should take as much as you need to cover your living expenses (rent, groceries, utilities, etc.) while keeping in mind that you may have additional expenses while you’re ill or injured not covered by your health insurance. If you buy your own policy, your benefits will not be taxed. Typically, 60% coverage is recommended as this would be reasonably close your current monthly take-home pay.
You should verify the amount of coverage you have through your employer and the terms of the policy. There are many reasons to purchase an individual policy, including:
- Your work coverage may not be enough. If your employer pays your premium, then your benefits would be taxed. However, if you pay the premium, your benefits are not taxed.
- Furthermore, many group policies cap the amount of coverage. Higher salary employees may be under-insured. A supplemental disability policy could help with closing that income gap.
- If you switch jobs, your policy probably won’t transfer. Depending on your age and health then, it may be more challenging to qualify for a policy if your new employer doesn’t offer this or if you will be self-employed.
This is the amount of time you have to wait after the first day you fall ill or get injured to when you start receiving your benefits. Policies can carry elimination periods of 30, 60, 90, 180 or 365 days. The general rule of thumb is the longer the elimination period, the lower your premiums are. Our plans kick off at 90 days as that is usually when employer plans typically stop their coverage.