Your financial strength is connected to your physical health. How would you pay your bills if you could not work tomorrow? Whether you are involved in an accident or have fallen ill, disability insurance can help you stabilize your income when you are unable to work.

If you become disabled and cannot work for a period of time, would you be able to continue paying your living expenses? How could you save for your retirement?

Disability insurance benefits can provide the income you need until you can return to work.

Why Should You Look at Your Short-Term Financial Needs?

When considering a short-term disability insurance policy, you should look at how a short–term disruption in earned income can significantly affect your long-term financial responsibilities. A short-term period of disability can impact your long-term financial stability if you are not adequately protected. It can escalate to a bigger problem affecting your finances for a longer period than your disability.

How much ongoing income would your family need if you were unable to work for a period of time? See the Insurance Planning Quick Report

What Are The Policy Basics For Disability Insurance?

Disability insurance policies vary among insurance companies. However, there are four main sections to a disability policy that you should know. Applying these sections properly help you plan for adequate insurance.

•  Benefit Amount: This is the amount of your income that you are protecting. This can be represented as a percentage of your income, or a specific dollar amount.

•  Benefit Period: This is the length of time that your benefits will pay. This can be set at one, two, or five years, or you can receive benefits until age 65 or for the rest of your life.

•  Disability Definition: This is an important section that determines when you are considered disabled. This can be defined as being disabled from your occupation or from any occupation.

•  Elimination Period: This is also referred to as an exclusion period. It is the length of time that you must be disabled before your benefits begin. This period can be set at 30, 60, 90, or 180 days, and in some policies as much as one or two years.

How Can You Save Money?

Disability insurance can be an expensive policy to buy. You can save money by participating in a long-term disability policy that your employer offers. Find out if your employer or union’s insurance company offers discounted premiums for this type of insurance. This can greatly reduce the cost of your disability insurance.

You can also save money by choosing the proper elimination period — coordinate the length of the elimination period with how much sick leave you have and how much cash you have immediately available.

Make sure that you are not overpaying on your coverage. Only insure what is absolutely necessary. Look at your monthly budget. That is the amount to insure.

Do you need to create a budget? Create your personal budget with the Budgeting Worksheet