We have another round of Insurance Do’s and Don’ts for you today.
Disability insurance is a lesser known, but equally important, form of insurance that protects you and your loved ones in the event that something happens to you that prevents you from working.
As the ER docs among us can confirm, “freak” accidents happen more likely than we’d like to think.
Whether it’s sickness, or an unfortunate accident, we can find ourselves “disabled” and unable to work in the blink of an eye.
Although it’s a bit morbid to think about, it’s important to plan for this scenario. If you wind up disabled in a way that prevents you from working for an extended period of time, you could be looking at a substantial loss of income, combined with hefty medical bills.
So, now that we all understand why disability insurance is important, let’s dive into some things that should be considered when purchasing a policy.
Disability Insurance Do’s and Don’ts
Don’t: “Risk it” and skip disability insurance
Do: Bite the bullet and get a policy.
This one may sound obvious based on the intro to this article, but a lot of people still choose to skip the disability policy and just hope that nothing happens to them.
Take this into consideration:
According to the Social Security Administration, the probability of getting disabled during your traditional working years is nearly twice as high as dying during that time.
This brings up a funny phenomenon. While most people would agree that life insurance is necessary, they tend to skip disability insurance – even though you’re almost twice as likely to get disabled as die during your working years.
Don’t: Choose a disability policy just because it’s the cheapest option.
Do: Consider your options and choose the policy that best fits your career and situation.
Like most things in life, with disability insurance, you normally get what you pay for. There are a lot of different options for disability insurance – each offering a different coverage level, at various price points.
One thing that’s especially important for healthcare professionals to look at is whether or not the policy is an “own occupation” policy. Like the name would suggest, an own occupation policy will cover you as long as you are deemed unable to work in your current occupation.
There are other policies that exist, that will only cover you if you are unable to perform ANY occupation. These policies are cheaper, but make it much more difficult to qualify for benefits.
Another important consideration is the “elimination period” on the policy. This is the length of time that you have to be disabled and not working before the policy will start to pay you. Policies with longer elimination periods are cheaper, but you should only choose that option if you have an adequate emergency fund to cover you for that length of time.
Don’t: Ignore the disability insurance benefit at your practice or workplace.
Do: Ask your benefits coordinator if there is a disability plan available to you.
More and more business and healthcare practices are offering employee sponsored disability insurance plans. Typically employees are able to choose from a small selection of options and pay the premium using a salary deferral.
This can be a great option, but it also doesn’t hurt to get quotes from private carriers to make sure your company’s plan is competitive.
InvestRx Is Here To Help
Confused by all this insurance talk? You’re not alone. While we don’t sell disability insurance, we’re happy to give you an independent review of policy quotes that you receive.
Our Financial Roadmap process is set up to provide unbiased, professional advice on your top 3 financial goals or concerns.
Don’t stop with insurance. We also love to help our clients with student loan planning, budgeting, investment advice, and anything else in your financial life.
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