Are you in good shape? How to stay in good financial health
It is always our goal to maintain peak health and fitness but what happens if you fall ill? Sadly, none of us are immune to disability or illness, although some may be more prone than others. It’s a well-known fact that exercise can boost your immune system and help prevent many illnesses from cardiovascular disease to anxiety and depression. However, the reverse is also true – many top elite sportsmen and women may suffer from illness or injury in their quest to remain at the peak of their performance. Essentially, regardless of how healthy your lifestyle might be, you would still be unable to rule out the possibility of becoming ill or injured. Rather than disregarding unpleasant possibilities, it would be wise to plan accordingly, just in case.
If you frequently fall ill or have a family history of serious diseases or illnesses, you may want to consider insurance that will protect you and your family against financial hardship if you are unable to work. This will help cover things such as student debt, family responsibilities, car, and mortgage payments. Understandably, the reality of becoming ill or injured would be devastating enough, which is why you should consider planning for the financial aspect rather than later find yourself confronting crippling financial chaos. When considering that the loss of your income would negatively impact every aspect of your life, you should take every measure possible to prevent this from happening.
The latest statistics indicate that 10 % of the world’s population lives with some kind of disability. In America, there is a 50% chance of becoming disabled for three months or more by the time you are 35. In reality, many young working professionals feel they are unlikely to find themselves battling a dread disease or recovering from a serious injury, which is unfortunately quite far from the truth. Young working professionals should consider the ultimate peace of mind that is associated with disability cover despite their age. Essentially, disability cover is not just suitable for individuals who may have a history of illness as this type of insurance is entirely intended for every working professional who aims at protecting their best interest.
SSDI
Some provisions are available through the state in the form of Social Security Disability Insurance. However, this cannot be relied upon as it is means-tested, very difficult to qualify for and the benefits paid out are likely to be very low. Considering the benefits would not be able to carry you and your family through the hardship, having to rely on social security disability insurance would have a massively negative impact on your well-being and ability to recover.
Two Different types of disability cover
Long term provides cover for disabilities that last longer than short term plans and are usually at least six months. The policyholder can claim 40-60% of their salary until they return to work, retire or a predetermined term expires. Even though long term disability cover may seem excessive, it is more often the most logical type of cover to opt for. On the downside, there is usually a longer waiting period before the policy starts paying out which can be anything from one month to two years. As disability cover is a type of insurance that encourages professionals to plan for the unexpected to best protect themselves and their families, the most appropriate option would be to opt for a long term cover that will essentially be able to provide a longer length of cover while paying out more reasonable benefits.
This contrasts with short-term disability insurance which covers disabilities that last for up to a few months. The pay-out is quicker and higher at 60-70% of a person’s salary but it may only last for a few weeks. While this type of cover may initially seem more alluring as it usually pays the policyholder out within less time, the policy will likely not be able to provide as many benefits as it is not tailored for individuals who will be unable to return to work for long periods of time. This policy may be most suitable for professionals who have experienced a minor injury or developed a curable illness that will prevent them from working for a short period of time. This means that a short term disability cover policy would not be able to provide you any relief in the event that you find yourself confronted with a diagnosis for a dreaded terminal illness.
Do you have a disability insurance cover at work?
It is worth checking whether or not you have a work-based plan. If this is the case, read the small print to ensure that the policy covers true-own occupation insurance which will payout in the event that your job changes. Rather than later finding yourself blind-sighted by the policy terms and conditions you should always confirm the details and determine whether or not they are suitable for you. If you have a work-based policy, you will be able to request a copy of the cover details from your companies human resources department.
What if you’re partially disabled but still able to do some of our work?
If this is you, then you need residual cover. This applies if you lose 15-20% of your income and are under the care of a physician. Residual disability benefits would essentially be triggered when the policyholder experiences a percentage loss of income as a result of their disability. Permanent partial disabilities are an example of a relative instance where residual cover would be useful. While you may not be entirely unable to work, you may not be entirely capable of earning and functioning at your best as a result of the partial disability.
Which is best – a work-based scheme or private?
Only you can decide which policy best fits your needs and those of your life circumstances. While some working professionals may only need to plan for themselves, others are faced with planning for their families as well. Because not everyone is challenged with identical concerns and genetic health worries, the same type of policy would not be appropriate for everyone. Realistically, this is why insurers have created various different types of policies to ensure that working professionals are able to select a type of cover that best speaks to them regarding their individual concerns. However, in most cases, a private scheme may seem like the most suitable solution. Finally, do bear in mind that tax is deductible on disability benefits paid out by work-based schemes, whereas payments received from an individual insurance policy are tax-free.
Regardless of the type of policy, you decide to settle on, you should still take measures to maintain a healthy lifestyle and a balanced diet. Even though living a healthy life will be beneficial for several proven reasons, this decision would also reduce the likeliness that you may need to use your disability insurance in the future. In short, do take good care of your health. And If you don’t yet have disability insurance, make sure that you shop around to get the best deal from it. Comparing various deals and ensuring you fully comprehend all the terms and conditions is crucial when purchasing insurance of any kind.
