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Disability Insurance

Posted by mzdee (My Page) on
Sun, Sep 3, 06 at 19:31

So, I'm putting my house on the market. It needs more work than I'm willing to put into it and its not where I want to grow old.

I'll end up with a larger mortgage and thats o.k. I have one child in college and I'm newly single. That means that I am the sole breadwinner. My only worry is what happens if I get sick. Do you think disability insurance is a good idea? And if so, what are good firms out there?


Follow-Up Postings:

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RE: Disability Insurance

Gotta think about your general health? Occupational Hazards?.. Need more info to get better replies


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RE: Disability Insurance

Disability insurance is a great idea for just about anyone (and, no, I don't sell insurance or have a family member who does). You are far more likely to be injured at work than killed. It also is more likely that you will injured in a way that prevents you from doing your own job, for which you are (ostensibly) qualified and experienced. Think about the pay cut you probably would have to take if you were to start over in a new line of work that didn't require as much skill or experience as you have. Could you afford to do that?

Most disability coverage issued through employers requires you to work at whatever skill level and income you can find. Similarly, while Social Security provides some disability income, they do so only if you are totally disabled. If you were a neurologist hauling in $300,000 a year but your disability still allows you to put pencils into a box (earning $11,000 a year to do that), you won't get most group disability coverage or SSDI.

"Own occupation" disability insurance is the kind of insurance you hope you'll never need -- but will find irreplaceable if you ever are unable to work, either short-term or long-term.


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RE: Disability Insurance

You will probably have workers' compensation (occupational coverage) if you're injured on the job via your employer (most states mandate the coverage).

Your employer may also have group long-term disability (LTD) coverage as part of its benefits plan. LTD will cover you for any disability (non-occupational) that causes your inability to work. Almost always protected by your own occupation for a couple of years and then at least your education, training & experience. The neurosurgeon would never be required to fill pencils or flip burgers under an employer's group plan (or most individual plans either!)

If you don't have LTD through your employer, it will be very expensive & you need to be healthy to get an individual policy through an agent. Although disability insurance is so important, it may not be your top priority right now -- but get some quotes and see if you can afford it.

Agree SSDI will only pay for total & permanent disability, usually takes lawyer involvement to get these payments if not permanent disability.

Lp


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RE: Disability Insurance

Given your stage of life and responsibilities, have you considered mortgage insurance? At the very least you would want that, I'd think--and we've known several people who it saved when they became sick, or the husband died before the mortgage was paid off.


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RE: Disability Insurance

Almost always protected by your own occupation for a couple of years and then at least your education, training & experience. The neurosurgeon would never be required to fill pencils or flip burgers under an employer's group plan (or most individual plans either!)

I guess things have changed in the 20 years or so I've been in the workforce. When I was first presented with my employer's disability plan lo those many years ago, it was made pretty clear that my income level and skill set had little to do with whether I was declared disabled. That's when I went out and got my own policy. I'm much more comfortable knowing that if, for some reason, I can no longer be an IT geek, I won't be watching some machine populate circuit boards for minimum wage.


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RE: Disability Insurance

With your life changing and a new home in your future, your first stop should probably be a financial planner who should evaluate your total insurance and financial plan.


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RE: Disability Insurance

Look at the definitions in your LTD booklet & you should see something like: "Disabled means that b/c of your injury or sickness, you cannot perform the material duties of your own occupation for ___ months and thereafter, cannot perform the material duties of any occupation for which you are reasonably fitted by training, education or experience". Very typical for past 20 yrs, haven't seen any definition in group plan that doesn't protect you by training, education or experience.

That said, group contracts have a lot more restrictions these days. Want to get you back to work! Individual contracts have always had more bells & whistles.

Lp


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RE: Disability Insurance

If you think about it your ability to earn an income and sustain your life is your most valuable asset. People spend more money protecting their material posessions (home, cars, etc.) than they do protecting their income. The present value of your income stream can be worth hundreds-of-thousands or even millions over the course of your working life. The problem is that people feel like they will be wasting their money on insurance if they never have to use it... but what if they do?
And, yes, I am a financial professional and in my 12 years in the business I have seen more than a few instances where people wished they had purchased all types of insurance when they had the chance. Looking back some people realize they were penny wise and pound foolish.
My suggestion is to look at where your position would be worse: paying an insurance premium while you are working, or having no income at all if you can't.


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RE: Disability Insurance

Thanks to all of you. You've given me a lot to think about and I'm researching all of my options.


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RE: Disability Insurance

I got one thing to say...GET IT! Back in Januaury 22, 1998 while I was working for a textile company on the way home (5 minutes from my house) I was run over by a drunk driver. I was a passenger in the front of the car and a drunk driver was in a big 4x4 truck and literally drove over the top of the car!He messed up the right side of my body pretty well but I won't get into all that. In the meantime, the new job I had started 2 months before had offered me disability insurance and I said no like a fool. No insurance, no income.Think hard.


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RE: Disability Insurance

What if your self-employed?


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RE: Disability Insurance

What if your self-employed?

You can buy disability insurance through other insurers. My personal policy is through UnumProvident (they bought Paul Revere Insurance, which held the policy originally). Call an independent insurance broker and ask about your options.


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