Disability Insurance & Income Protection

Like most people, you may have a number of monthly, ongoing financial obligations you’re responsible for, such as a mortgage or rent, car payments, credit card debt, and everyday expenses. If you become disabled, you will still need to fulfill your financial commitments and provide for your loved ones. Some individuals may have a short term disability (STD) or long term disability (LTD) plan through their employer, but the replaced income through such policies while on disability may not be enough. Therefore, it’s important to help protect a portion of your income with an Individual Disability Income (DI), as this may help protect more of your income, if you become too sick or injured to work for an extended period of time.

Before choosing a disability insurance policy, consider what your financial situation would be if you suddenly lost your ability to work and earn an income.

Disability Insurance & Income Protection

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Types of Disability Insurance

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• Individual Disability Insurance

Individual Disability Insurance provides benefits to help replace and protect your income if you should become disabled and not able to perform the normal duties of your job. For those individuals whose employer does not provide LTD insurance or are self-employed, they should explore DI and protecting their income. In general, premiums are higher for policies that provide more monthly benefits, offer benefits for longer periods of time, and start payments of benefits more quickly following a disability claim. Premiums also tend to be higher for policies that define disability in broader terms, meaning the policy would pay benefits in a wider variety of circumstances. Premiums and available benefits for individual coverage vary considerably between companies, occupations, states and countries.

• Key Person Disability

Key Person Disability Insurance provides benefits to protect a company from financial hardship that may result from the loss of a key employee due to disability. The company can use the benefits when an insured key-person becomes disabled to hire a temporary employee in the event the disabled employee’s disability appear to be short-term. If the key-person has a permanent disability, benefits are used to help cover some of costs related to hiring a replacement, including recruitment, training, startup, loss in revenue and unfunded salary continuation costs.

• Business Overhead Expense Disability Insurance

Business Overhead Expense (BOE) coverage reimburses a business for overhead expenses should the owner experience a disability. Eligible benefits include: rent or mortgage payments, utilities, leasing costs, laundry/maintenance, accounting/billing and collection service fees, business insurance premiums, employee salaries, employee benefits, property tax, and other regular monthly expenses.

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