Most of the time when you think of insurance you think of health, life, home and auto. However, there is another very important type of insurance that many people forget to include in their financial plan and that is disability insurance. Just one temporary incident or illness could wreak havoc on your finances.
Statistic show that you are twice as likely to become disabled for 3 or more months between the ages of 35 to 65 than you are to die in that same period of time. Don’t overlook disability insurance in your financial planning. Here are some tips to help you choose the right coverage to protect you, your family and your finances.
* How much coverage do you need? You will need to figure up the total after-tax income you would have from all sources during a period of disability and subtract this sum from your minimum needs.
* What you can afford? Disability insurance can be expensive. You may opt to forego adding riders and options that boost premiums significantly. If your budget won't support the ideal benefit payment, consider lengthening the elimination period. Just be sure that accumulated sick leave and savings will carry you until the benefits kick in.
* Analyze key policy terms. How is "disability" defined? Some policies use "any occupation" to determine if you are fit for work following an illness or accident. A better definition is "own occupation." That way you receive benefits when you cannot perform the job you held at the time you became disabled.
* Check the benefit period. Ideally, you want your policy to cover disabilities until you'll be eligible for Medicare and social security.
At Summit CPA we can help you get on the right personal and business financial track. We also have the capability to assist you virtually anywhere in the USA. If you need assistance, contact our office at (855) 977-7623 to schedule an appointment with our advisors.