How to Properly Purchase a Disability Insurance Policy

Disability insurance isn’t something that everybody thinks about, and if you’re employed with any company, chances are you don’t really need it. However, if you are your own boss, run your own company or simply do freelance work – even in addition to your regular work – you may need disability insurance. That way you’ll be covered if you get hurt on the job or in your personal life and aren’t able to perform. Otherwise you may not be able to make ends meet, and that can be disastrous for you and your family. Use these tips to help you pick the right type of disability insurance.

Source: Free Digital Photos

• Check the definition of the word disability in your policy before you buy. Some policies allow you to collect based on what you do and what you really earn. Others only allow you to collect based on your experience and education levels, even if that isn’t commensurate with what you actually make or what you need to live your current lifestyle.
• Make sure you get a policy that replaces an appropriate amount of your earnings. Ideally, you want a policy that will pay out between 60% and 70% of your taxable earnings. That way you won’t have to alter your spending too much.
• Look at your policy to see how long you’ll get benefits. You want benefits until at least retirement age.
• Find out if your plan allows for a cost-of-living increase. If you have to stay on disability for a while or receive long-term benefits, you need to make sure you’re covered. Rent and everything from groceries to gasoline prices tend to go up over time. You need to be covered when your monthly costs rise.

Contact Schumacher Insurance Agency to learn more about how to purchase the right disability insurance plan.