Disability
Insurance can help keep you financially stable
during difficult times by paying a monthly income,
directly to you, when you are sick or hurt and unable
to work. According to the Commissioner's Disability
Income Table, the risk of becoming diabled for over
30 days before turning age 65 is 77% if you're age
25, decreasing to a 58% chance if you're age 50. It
is great as a primary income replacement plan or as
a supplement to your salary continuation or group disability
plan.
Determining the Need for Disability Insurance
The key questions to ask are, if you were to become disabled, how would you:
 Replace
your income?
Make
monthly rent or mortgage payments?
Buy
groceries?
Handle
the balance of your day-to-day expenses?
Provide
for your children's education or welfare?
Save
for retirement?
Potential Sources of Funds in the Event of Disability
Employer - How long would the business
continue to pay you? How much would it pay you? When
would your employer have to hire a replacement? Could
the business afford to pay both?
Savings - If you saved 10% of your income each
year, one year of total disability could wipe out 10
years of savings. Can you afford that?
Loan - Without an income, who will lend you
money?
Investments - Will a sale under forced conditions
bring a true value? What will their value be at the
time you are disabled?
Spouse - Can your spouse earn enough and be
partner, parent, private nurse, and employee -all at
the same time?
Friends or Charity - Would these sources have
funds for you to use? Do you want to depend on them?
Social Security - You cannot collect benefits
until the end of the fifth full calendar month of total
disability and only if it is expected to last 12 months
or more. What will you do if your disability doesn't
meet those requirements? Even if it does, can you wait
six months for payment?
Disability Insurance - as referenced above,
disability insurance can help keep you financially
stable during difficult times by paying a monthly income,
directly to you, when you are sick or hurt and unable
to work.
Disability Policy Options
You have the option to choose the combination of coverages that best meet your
needs by selecting:
The
amount of coverage you need - flexible monthly benefit options.
The
length of time you must be disabled before benefits begin - 60, 90, 180,
365, or 730 consecutive days.
The
length of time benefits are paid to you - one year, five years, or to age
65.
Disability Policy Benefits
Monthly Income Amount - After you have been totally disabled
because of injury or sickness for the elimination period selected, most insurance
companies begin payment of the monthly income amount while you are totally
disabled, up to the maximum benefit period you chose.
Partial Disability - If you remain partially disabled following a
period of total disability, some insurance companies will pay 50% of the
monthly income amount for up to six months.
Waiver of Premium - After benefits have been payable for three consecutive
months, the subsequent premiums falling due are waived (paid by the company)
while your disability continues.
Rehabilitation Expense - If during a period for which total disability
benefits are paid, you participate in a formal, approved rehabilitation program,
the insurance company will pay for the costs actually incurred for tuition,
books, and equipment, up to six times the monthly income amount or $10,000,
whichever is less.
Additional Purchase Option - On the fifth policy anniversary (depending
upon the insurance company's policy), you may have the option to purchase
an additional disability income policy without evidence of insurability.
Age, financial, and occupation class requirements must be met for issue and
participation limits in effect on that date.
Social Security Supplement Rider - Pays an amount in addition to the
monthly income for total disability during the first six months that disability
benefits are payable. To continue receiving benefits beyond six months, you
must provide documentation that you have applied for Social Security disability
benefits. Benefits for the seventh and subsequent months will be reduced
by any benefits payable by Social Security.
Cost of Living Adjustment Rider - Provides for an additional benefit
based on the Consumer Price Index (CPI-U) after benefits for total disability
have been payable for twelve consecutive months. The Cost of Living Adjustment
Rider is limited to a 5% (depending upon the insurance company's policy)
annual maximum increase and an overall maximum equal to the monthly income
amount selected.
Shoreline's Competitive Edge
Whatever your need, protecting against the costs associated with disability is
an important choice. There are many plans and competitive rates Shoreline Wealth
and Investment Management can assist you in obtaining.
For more information:
If you'd like more information about how diversified investment advisors can help you achieve your financial objectives through personalized wealth or retirement and risk management strategies, please contact us. We welcome the opportunity to discuss your unique needs and how we may best meet them.
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Charles M. Bloom, Registered Principal offers securities
and advisory services through Centaurus Financial, Inc. - 214 Calle Palo Colorado, CA, 93105 (mailing address: 3905 State Street Suite 7173, Santa Barbara, CA, 93105) - Member FINRA and SIPC.
The information contained in this web site is neither an offer nor solicitation of any security or service.
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