Ok, picture this…
You’re driving along in your brand-new Mercedes you just financed at $600 a month (not to mention the auto insurance payment) and out of nowhere comes a young teenage driver “texting away” who plows right into you, paralyzing you from the waist down!
Over dramatic? Maybe.
A realistic possibility? Definitely.
But here is the real scary part…
One thing that we’ve learned here at TermLife2Go is that lots of people are understand why it’s important to purchase a term or whole life insurance policy for their family, but few people also think about what would happen to their loved ones and themselves if they became sick or where seriously injured and weren’t able to continue working in their chosen field.
And as a…
As a paralegal, legal assistant, lawyer, or even judge, you may think that you’re doing pretty well financially today. You can pay your bills each month which include mortgage, car payments, perhaps student loans, maybe even child support or alimony. And you may even have a huge retirement account and plenty of life insurance to help your family should you die.
But the problem is…
Your job is a very specialized job. Not everyone has the skills or the education to make the decisions you make on a daily basis that can affect other people’s lives. Your education and experience are essential to the legal industry and are what make your position such a highly paid profession.
Which means that…
If you suddenly get sick or are injured and can’t perform you job any longer, it’s not like you’re going to be able to find another position that can easily take the place of your current position financially. This is particularly true if you’re the primary “bread earner” for you family.
What would happen to your family if this week’s paycheck was your last?
- Would your boss allow you to reduce your full-time job to part-time?
- Would you take money out of your retirement account therefore not allowing you to retire when you want to?
- Would you consider your child’s college savings taking away from their ability to receive an excellent education?
- Would you force your spouse to get a second job?
- Would you have to “downsize” your current home or move to a more affordable neighborhood?
How about getting a different job that pays the same as you make now?
- Would that be a possibility?
So, what is…
Your plan if you’re injured or are diagnosed with a medical condition that prevents you from being able to work?
This is where…
Long-term disability insurance comes in to play. Even if you have employer-sponsored coverage, chances are it will only pay a portion of your income. The income is also taxable. Purchasing an individual policy, even just to supplement a short-term disability insurance policy, is the smartest option for you (in our humble opinion).
Plus let’s get real…
It’s common knowledge that (for most people) the more you make, the more you spend so even though you may be making well over 6 figures, chances are even a “brief” cessation of one’s income can cause SIGNIFICANT hardship regardless of how “wealthy” you are!
That said however…
Not all disability insurance companies are the same. This is why it’s so important to have an expert walk you through the different “types” of disability insurance policies that are out there, and help you avoid many of the “pitfalls” within the industry that could prevent you from getting the “best” disability insurance policy for you!
What do we mean by “pitfalls”?
That’s easy, in order for you to know if you are getting the best disability insurance policy for you, you’re going to want to be familiar with several “key” terms that will be found throughout your policy.
Terms such as:
- Income Benefit
- Elimination Period
- Benefit Period
- Own Occupation Definition of Total Disability
- Any Occupation of Total Disability
And before we lose you and start discussing these “terms” in greater detail, know this…
When you call us here at TermLife2Go or request a quote for disability insurance, making sure that you are familiar with all of these terms and making sure that you understand which insurance company is going to offer you the “best” disability insurance policy for you and your family is our number one goal.
So, you don’t need…
To get freaked out by all the details that we’re about to get into, because that is what we’re here for.
Not that we like to make any assumptions about our clients or anything, but we have noticed a “tendency” for many people in the legal field to want to review the policy in it’s entirely before applying for coverage.
Which is great!
It’s those “tendencies” that probably led you to seek a carrier in the legal field and is probably why you’re as successful as you are! So, rest assured that here at TermLife2Go, we’ll gladly send you PDF file of any disability insurance policy that you may be considering in its entirety so that you can review before applying for coverage.
That said however…
We do want to briefly introduce to you some of the terms you want to look out for when comparing different policies vs. one another.
The income benefit.
The Income benefit is the amount of money that you will receive monthly from the disability insurance company. The insurer will use a formula to determine the benefit amount you can qualify for. If you are totally disabled you will receive your income benefit, but not until after the elimination period.
The elimination period.
Is the amount of time that you must “wait” before your policy will begin making payments once it has been determined that you qualify for benefits. When applying, you will be able to make the decision on how long or short of an elimination period you will want to have.
The longer out the period extends, the lower your premiums, but the longer before you get paid (or receive a benefit from your disability insurance policy).
You can choose a short period of 30 days, 90, 180, 365, all the way up to 730 days. Once the elimination period ends you can start on your benefit period.
The benefit period.
Your benefit period determines how long you will receive your payments if you remain totally disabled. Once again, the longer your benefit period, the longer you get paid, but the higher your disability insurance premiums will be.
Benefit periods can be as short as 1 year, 2, 5, 10 years or to age 65 or to age 67, with some companies offering conditional benefit periods up to age 75.
Own Occupation definition.
All benefit payments will be dependent on you meeting the definition of total disability within your disability insurance policy. Ideally, you want an OWN OCCUPATION definition of total disability. The own occupation definition for total disability requires that you are unable to perform the substantial and material duties of your regular occupation.
Why does this definition matter?
Simple, because a true own occupation policy still considers you totally disabled if you are gainfully employed in another occupation so long as, solely due to injury or sickness, you are not able to work in your occupation.
What does that mean?
It means you are still considered disabled by your disability insurance policy and getting your income benefit, even though you are gainfully employed in another occupation. Now compare that definition to any occupation.
ANY OCCUPATION definition
With ANY OCCUPATION definition of total disability requires that you are unable to perform the substantial and material duties of any gainful occupation.
Do you see what they did here?
That is a vague definition and applies to pretty much any work out there. And we don’t think you need to have a career in the legal field to see that this “broader” definition isn’t there to help you out!
If you just spent the last 4 years of your life busting your hump to become an attorney and you become injured or sick to the point that you can no longer practice law, under an “any occupation” definition you would not receive benefits if you became a consultant or some other job that was related to your field.
Some other terms you need to be aware of are:
- Guaranteed Renewable
When you take out a private long term disability insurance policy the last thing you want to be worried about is the provider raising premiums on you. So, the remedy is to get a policy that is noncancelable.
Noncancelable means the premiums remain fixed for the life of the policy. The alternative is guaranteed renewable, which provides that the carrier reserves the right to raise premiums on a specific class down the road. You are guaranteed the right to renew your coverage until the policy end date, but the insurer reserves the right to raise your disability income insurance rates.
Lots of “rights”, we know. It is a contract, after all.
So, are you ready…
To find out how much coverage you can qualify for and how much that insurance will cost? If so, just give us call and see what we can do for you!
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