 | ||||
Disability Income Protection
When a disability leaves you unable to work for an extended length of time, you lose the ability to earn an income - the one thing you've always relied on to provide for yourself and your loved ones. Meanwhile, your living expenses continue-in fact, they're likely to increase for a number of reasons. You could need help around the house or have higher medical expenses, for example. That's where disability income insurance (DI) comes in. It's designed to help you maintain your standard of living when you cannot work. If you don't have much in the way of assets for a financial cushion, you need enough to cover costs and supplement your income until you can go back to work.
Disability income insurance is needed by just about everyone who earns a living. Surprisingly, single people often need it more than married couples because they don't have a spouse's income to fall back on if they are injured or become too sick to work. On the other hand, most married people have a hard time imagining what it would be like to live on one salary when they barely get by on two. And unfortunately, disability strikes more often than you may think.
Tax Advantage
When you buy an individual DI policy, the annual premiums you pay are not tax deductible. If you collect the benefits, however, the money you receive will not be taxed. When you purchase disability insurance through your employer, you may be able to have premiums deducted from your pay on a pretax basis. If this option is available, you lower the amount of earnings your employer reports to the IRS and thus your current income taxes. The downside is that any benefits you get are considered taxable income.
Protection Through Your Employer
If you work, your employer may provide disability income insurance—or group coverage. Group coverage is less expensive than individual, or private, policies, but it won't pay as much as your salary. So if the coverage won't provide at least 60% of your income, won't pay benefits up to age 65, and has a waiting period longer than your savings will keep you afloat, you'll probably need private insurance, too.
Worker's Compensation
It's likely that you already have a small amount of disability income insurance through Workers' Compensation. Most employers are required to provide this coverage, but it only pays if your disability is job-related, which means you're out of luck when it comes to sickness or off-the-job injuries. While the amount and duration of benefits varies by state, typically they are short-term--lasting for a few years at most--and the payments are low. That's why it's not very practical to consider workers' compensation when evaluating your protection needs.
Social Security
Social Security also offers some disability income insurance. But beyond the many restrictions placed on who can qualify, the amount Social Security pays probably won't be enough for you or your family to maintain the standard of living you're used to. So it's not usually wise to rely exclusively on Social Security benefits when determining the amount of DI protection you'll need.
744 W. Lancaster Avenue . Suite 235 . Wayne . PA 19087 I Phone: 610.293.8300 I Fax: 610.293.8399
FAQs on
Disability Insurance
What is the Definition
of Disability?
Disability is considered either "Own Occupation," which is the inability to perform the duties of your own specific occupation, or "Any Occupation," which is the inability to perform the duties of any job for which your education or training qualify you.
How Much is
the Benefit?
Most policies have a fixed monthly benefit. Although the benefit doesn't increase over time, you can usually purchase extra coverage or cost of living increases.
When do I Receive
the First Benefit?
There is a waiting period between the time you become disabled and the time you begin to receive benefits. Waiting periods can range from one week to two years. In general, the longer the waiting period, the less the policy costs.
How Long Will the
Benefits Last?
The benefit period, which is how long you receive monthly benefits, can range from six months to the rest of your life, depending on what your company offers and the choices you make.
Click below on any PDF files for more information about Disability Income.
Financial Representative of The Guardian Life Insurance Company of America, New York, NY. The Information on this site is intended for the residents of Connecticut (CT), Delaware (DE), Florida (FL), Massachusetts (MA), New Jersey (NJ), New York (NY), and Pennsylvania (PA). The financial representatives of Devon Financial Associates LLC are not licensed to sell insurance in all 50 states. To find out if an agent is licensed in your state, please contact Colleen Marzella at 610-293-8320.
Securities products and services are offered through Registered Representatives of Park Avenue Securities LLC (PAS), 7 Hanover Square, New York, NY 10004, 1-888-600-4667. Devon Financial Associates, LLC is not an affiliate or subsidiary of PAS.
PAS is a member FINRA & SIPC. (www.finra.org)
Registered Representatives are securities licensed in Connecticut (CT), Delaware (DE),Florida (FL), Massachusetts (MA), New Jersey (NJ), New York (NY), and Pennsylvania (PA) and is strictly intended for individuals residing in those states. No offers may be made or accepted from any resident outside these specified states.
Neither Park Avenue Securities, Guardian, nor their representatives render legal or tax advice. Please consult with your attorney, accountant, and/or tax advisor for advice concerning your particular circumstances.
The information or opinions contained in this Internet site should not be construed by any consumer and/or prospective client as an offer to sell or the solicitation of an offer to buy any particular investment product. The information contained herein is directed solely to those individuals who reside in jurisdictions in which the representative is registered in the state where the consumer and/or prospective client reside. Any subsequent direct communication with a consumer and/or prospective client shall only be conducted by a representative that is registered in the state where the consumer and/or prospective client reside.
Individual health insurance products or services are not offered by Guardian. Property and Casualty insurance products or services are not offered by Guardian.
The Living Balance Sheet® and the Living Balance Sheet® Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. The graphics and text used herein are the exclusive property of Guardian and protected under U.S. and International copyright laws. © Copyright 2005-2011, The Guardian Life Insurance Company of America.
Links to other sites are for your convenience in locating related information and services. This Agency, The Guardian Life Insurance Company of America (Guardian) and Park Avenue Securities, LLC (PAS) do not maintain these other sites and have no control over the organizations that maintain the sites or the information, products or services these organizations provide. Although this Agency, Guardian and PAS believe that the information from these organizations is reliable, we cannot guarantee its completeness or suitability for any purpose. Accordingly, this Agency, Guardian and PAS expressly disclaim any responsibility for the content, the accuracy of the information or the quality of products or services provided by the organizations that maintain these sites. This Agency, Guardian and PAS do not recommend or endorse these organizations or their products or services in any way.
© 2011 Devon Financial Partners . 744 W. Lancaster Avenue . Suite 235 . Wayne . PA 19087
