Disability

If you were disabled and unable to work as a result of an accident or illness, what would you and your family do for income? There are 3 basic ways you may be able to replace your lost income:

1. Social Security disability benefits

This can be paid to workers whose disability is expected to last at least 12 months and is so severe that no gainful employment can be performed.

2. Employer-paid disability insurance

This is required in most states. Most employers provide some short-term sick leave. Many larger employers provide long-term disability coverage as well, typically with benefits of up to 60 percent of salary lasting from five years to age 65, and in some cases extended for life.

3. Individual disability income insurance policies

Other limited replacement income is available for workers under some circumstances from workers compensation (if the injury or illness is job-related), auto insurance (if disability results from an auto accident) and the Department of Veterans Affairs.

For most workers, even those with some employer-paid coverage, an individual disability income policy is the best way to ensure adequate income in the event of disability. When you buy a private disability income policy, you can expect to replace from 50% to 70% of income. Insurers won’t replace all your income because they want you to have an incentive to return to work. However, when you pay the premiums yourself, disability benefits are not taxed. (Benefits from employer-paid policies are subject to income tax.)

Disability Insurance can be purchased to cover either short-term disability or long-term disability. Click here to find out more about short-term and click here to find out more about long-term to see which one might be right for you.

For more information please call (203) 237-7900 or click here

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