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How “Long” Is Short Term Disability?
There is a simple answer to the question, “How long is short term disability?” from an insurance perspective. Benefits in the majority of short term insurance contracts are payable to a maximum of one year. Many short term programs last considerably less, some for just 13 through 26 weeks. These programs are not typically designed to serve the function or have the options of long term disability coverage.
Short term disability insurance is sometimes called “cash sickness” coverage or temporary disability insurance (TDI) because it protects people from a typical injury or illness that prevents them from performing their occupations for a short period of time, usually measured in months. This coverage was not created to help you in more serious situations.
People covered by employer-paid short term disability insurance and/or government programs (temporary disability insurance in five states and Puerto Rico or Workers Compensation coverage in all states) should consider matching this insurance with long term protection. Should you suffer an injury or illness that prevents you from working for years instead of months, the difference between long term and short term disability insurance will be graphically displayed with unwelcome results.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: The Statistical Likelihood of Disability
While we all want to believe in our immortality, particularly when we’re younger, the disability statistics provide an unwelcome, but harsh injection of reality. Although there are some mathematical differences in results, the likelihood of disability for most people, regardless of occupation, ranges from 15% to 25% between the ages of around 25 to 65. Regardless of your belief in luck, fate, or history, the odds, ranging from around one in seven to one in four, are not in your favor. Available disability statistics reinforce the generally accepted theory that your current and future income is your most important asset and should be protected to the best of your ability. Have you given thought to how you’d manage your household if your current income abruptly stopped because of injury or illness? If you are in business or have your own practice, how would your ongoing monthly business expenses get paid if you were unable to practice your specialty for a time?
The statistical likelihood of disability indicates that an investment in an effective disability income insurance policy is a wise decision. Employer disability insurance is offered by many companies but professionals (and others) should consider getting individual coverage. Employer-paid disability and health insurance coverage is wonderful. But when you change employers, you lose this protection. Portability of coverage could be very important in the future.
The likelihood of disability data indicates that you need to seriously consider having sufficient disability insurance coverage. Statistics of disability, regardless of your current medical history, dictate that protection of your most important asset -- your earning power -- should be first on your to do list..
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Know What “Own Occupation” Means
You’ll not be surprised to learn that disability insurance has an extensive glossary of terms you may not immediately comprehend. Most insurance policies are often based on a specific universe of terms that relate to the coverage offered. None are more important than "own occupation" coverage.
This provision in a disability insurance income policy specifies the conditions under which a disability is present and the own occupation period over which benefits will be paid. Unlike many basic and government disability insurance policies, coverage that includes an own occupation definition will normally qualify you to continue to receive monthly income benefits until you are able to perform the specific duties of your specialty.
This means that, unlike basic disability coverage, which often specifies that benefits end when you are able to perform the duties of any gainful occupation, having an own occupation rider or language normally keeps you eligible for benefits until you can return to practicing your specialty. Obviously, this affords you a much higher level of protection. As a professional, this is a level of protection that you should have, if at all possible.
As you can see, this term and definition of covered disability is a most important feature of income insurance protection. Be sure to examine the specific language of an own occupation provision or rider offered by your insurer. Even commonly accepted definitions of own occupation insurance may have a variety of modifiers and or enhancers in different insurance contracts. Use excellent websites, like ProtectYourIncome.com, to get more information to assist you in making the best disability insurance decisions for you.
The above-listed tip is for informational use only. Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: Why Medical and Legal Professionals Should Strongly Consider Own Occupation Disability Insurance
The years you’ve spent becoming a successful medical, legal, or other professional are bearing the fruit you hoped it would. Practicing your specialty while earning high level compensation has become your most important asset and should be adequately protected. Good disability insurance coverage is a critical component of the continued success of your career. An important feature of that coverage is often the inclusion of own occupation disability insurance language.
A basic group or individual disability income insurance policy is certainly better than no protection at all. However, most basic coverage includes what is normally called “any occupation” language. This language states that after you’ve recovered sufficiently from a covered disability to perform the duties of any gainful occupation, you may no longer be eligible for benefits. While not necessarily a major problem with many common occupations, this language could become an unpleasant situation for a professional.
Not just your general occupation, but your specialty is the engine that drives your income stream. Suffering a disability and then recovering to a level that allows you to perform the duties of another occupation provides little comfort, and, more importantly – little income. To earn your former level of income, you need to have the ability to perform your specialty.
Own occupation disability insurance coverage provides you the security of knowing that, should you suffer a covered disability, you will receive your policy’s stated monthly income benefits UNTIL you are able to resume the duties of your specialty. A partial recovery that allows you to perform the duties of some other occupation will not disqualify you from receiving further benefits. As you can see, as a medical or other professional, it is important for you to consider making an own occupation definition of disability a part of your income protection package.
The above-listed tip is for informational use only. Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Disability Income Insurance Programs Offered by the Federal Government
All federal disability insurance plans are not simply government Social Security disability programs. There are actually six entities offering disability income insurance that are classified as government programs.
Social Security Disability Insurance (SSDI). This is the most popular and recognizable program and is often not subject to disability insurance income tax. Taxability normally results from your level of other earnings during your disability benefit period.
Medicare Benefits. If disabled, you may be eligible to enroll in the Medicare program.
Workers Compensation. This program helps protect your income should you become disabled while performing the duties of your job.
Veterans Benefits. Formerly called the Veterans Administration (VA), disability benefits you receive from the Department of Veterans Affairs are often not taxed.
Military Benefits. Military disability pensions are often taxable. However, if you suffered your disability while in active service, you may receive an exclusion.
Federal Employees Retirement System (FERS). Federal employees enrolled in the system can become eligible for employee disability benefits, but most insurance benefits are often taxable until you reach a specified age.
As with many other government programs, federal disability insurance have a number of requirements and conditions. To learn about disability benefit levels and qualification regulations, perform your own research to get a knowledge base that may help you should you need benefits in the future.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: The Information You Should Have to Request a Good Disability Insurance Quote
You should have a good idea about what you want and need when you request a disability insurance quote. Spend some quality time considering the level of coverage you want, balanced based on your monthly cash flow needs. Ask yourself the following questions at a minimum.
How much monthly income do I need to meet my expenses? First, determine your basic living expenses (food, clothing, and shelter). Then consider other fixed personal expenses (auto loans, credit card minimum payments, other insurance, etc.) to learn how much cash you need on a monthly basis. Look at what you spent on average over the last 12 months.
How long or short an elimination (waiting) period should I have? Estimate how long you could “survive” using your current cash reserves before you’ll need your disability insurance to begin providing benefits. While you’ll no doubt want the shortest period available, you’ll find a significant cost savings with longer waiting periods.
Based on my occupation, what definition of disability should I seek? Always try to get a policy with the most liberal definition of disability, the “own occupation definition.”
How long a benefit period should I have? As with all disability insurance quotes, this consideration will affect both your premium cost and piece of mind factors. If premium cost were not an issue, you would probably want benefits payable until age 65 or even for life. To adequately protect yourself and your family, consider the longest benefit period that your current cash flow allows.
Do I need both a short- and long-term disability insurance quote? Depending on your situation, you may need one or the other or both to sufficiently protect your income stream. Short term disability insurance is typically only available as an employee benefit or a state insurance benefit.
Make sure you have tax returns and/or other written evidence of your current monthly income You will need to provide this information to get a disability insurance policy but not for a quote. Since disability insurance generally will pay you 50% to 65% of your current monthly compensation, your insurer will need to know your current level of verifiable income.
It is wise to have this information (and any other you feel relevant) at your fingertips when you seek a disability insurance quote. Examine the information on ProtectYourIncome.com to gather knowledge and possible suggestions of other items you should consider.
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Government Disability Insurance Explained
A gentleman named Tom Comeau once commented: “The AP reported that Social Security celebrated its 65th birthday recently. No wonder it’s about to quit working.” But disability income insurance is still regularly being provided by the government. A discussion of federal disability insurance programs generally includes the Social Security Disability Insurance (SSDI) program and the Supplemental Security Income (SSI) plan.
SSDI remains the primary government supplier of disability benefits to qualified citizens. To be eligible, you must have
Worked in jobs covered by Social Security
Have a medical condition that meets the Social Security definition of disability
Be unable to work for a year or more
If you qualify, insurance benefits are payable even if you are covered by a private group or individual disability insurance plan. A potential downside is the sometimes complex and often time-consuming application process. Patience is a key word in this case.
The SSI disability program is designed to provide you with cash for the basic necessities of life, including food, clothing, and shelter. Primary eligibility for SSI benefits is based on your age (65 or older) OR blindness OR disability AND provided you have limited income, limited resources, and are a U.S. citizen, national, or an alien in a covered category.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: Why Good Physician Disability Insurance May Appear to Be Expensive
At first glance, you might believe that physician disability insurance appears to be a bit expensive – particularly when compared with some of the group disability plans of which you might be aware. However, as sometimes occurs with an initial diagnosis of a patient’s problems, all is not necessarily as it first appears. The nature of medical doctors and the invaluable service they perform suggests that doctor disability insurance coverage is adequate to provide appropriate benefits when needed.
A significant factor is the definition of disability in physician disability insurance. For example, most group disability insurance for employers states that one is no longer technically disabled if they can perform “any gainful occupation.” Therefore, unless you have the burning desire to give up your practice of medicine and join the fast food workforce or become a library employee, you should be aware of the disability determination of your coverage.
Disability insurance for physicians should, whenever possible, contain an “own-occupation” provision. This means that you would be considered disabled – and eligible to receive income benefits – until you were able to resume the specific duties of your specialty. There is a cost for this added protection, but most medical doctors should strongly consider having this protection.
You should also be aware that generally acknowledged statistics suggest that, in the case of disability insurance for doctors, there is a significant likelihood of the payout of benefits in the future. Some industry studies have concluded that approximately one of every seven people will suffer a five-year disability before the age of 65. Therefore, premiums must be calculated accordingly.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Where to Find Doctor Disability Insurance Company Financial Ratings
It is important to know that the company from which you purchase your disability insurance for doctors is financially stable to help ensure that they will be there for you should you need them. Learning about the financial condition of the companys' programs you might consider is fairly easy. There are a number of well-respected entities that provide ratings for many insurance companies. A few of the best are:
A.M. Best Company
Standard & Poor
Moody’s Investors Service
Fitch, Inc.
Whether you check these or other services, be sure to understand their rating code system. A company rated “A” by one service may be the highest evaluation given, but if a service company ratings go to “AAA”, an “A” rated company may only be ranked in third, not first, place. While that, by itself is not a “bad” situation, you should always be aware of the ratings definitions so you can make profitable judgments.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Estimate What Good Doctor Disability Insurance Coverage Might Cost
Physician disability insurance is a critical component of your doctor’s healthcare package of coverage. Estimating the cost of “good” coverage can be a bit challenging but here is a rule of thumb. If you budget from 1% to 4% of your gross income for the cost of appropriate doctor’s disability insurance, you should be in the right ball park.
The final cost of your temporary disability insurance will be commonly influenced by the following factors:
Using the standard definition of covered disability or the inclusion of an “own-occupation” provision, which provides benefits until you are able to resume the specific duties of your profession and specialty.
The addition of other provisions that may provide additional coverage or lump sum benefits, such as residual disability or presumptive disability coverage.
Adding business overhead expense coverage if you own your practice or are a partner in one.
Your personal medical history. You may enjoy premium pricing or be subject to a “rated” premium based on your personal health record.
Disability insurance for physicians is not inexpensive, but, when it’s needed, the small percentage of gross income you spend on adequate coverage will normally be a very modest price to pay for maintaining your income during periods of disability.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Commonly Considered Factors When You Apply for Dentist Disability Insurance
Here are some of the factors that you should consider when you look for a dentist disability insurance policy. These and possibly other factors can influence your eligibility for coverage and/or the rates you might be quoted.
Definition of disability.Do you want an “any-occupation” or an “own-occupation” type policy? One type of policy usually states that you’ve recovered from your disability when you become able to perform the duties of any gainful occupation. With “own-occupation” provisions, you are normally considered to be disabled until you can resume the duties of your specialty.
Non-cancelable or guaranteed renewable coverage.If you want this important provision usually included in most disability insurance for dentists coverage.
Age, gender, and health condition.You will not be surprised to learn that these factors weigh heavily in your eligibility and/or cost for protection.
Your specific specialty.Own occupation coverage on some of the better disability insurance for dentists further expand the definition to defining your occupation (own occupation coverage) to disability coverage in your specialty. For example, if you're an orthodontist and cannot practice orthodontistry because of illness or accident then the claim would be paid (subject to insurance company approval).
Options, riders, and extra provisions.An additional feature you want such as residual (partial) disability. Many policies also include or offer: presumptive disability, inflation protection, and a future disability option (ability to increase limits without medical exam).
There may be other factors, including the financial rating of the insurance company you’re considering that are important in the choice of your coverage. Use informative websites like ProtectYourIncome.com to get all the information you need to find the best dentist disability insurance program for you.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Combine Disability Insurance for Dentists with Business Overhead Expense Coverage
If you’re in practice for yourself, or even if you are a partner in a larger practice, you should consider linking dentist disability insurance with business overhead expenses coverage as part of your dentist health program. While maintaining your personal income stream is a top consideration, you are also a businessperson if you are in private practice. And it's wise to think like a businessperson as well as a medical professional.
Should you suffer an injury or illness that renders you unable to practice your specialty, even if you sufficiently protect your personal income stream with disability insurance for dentists, where will the funds come to maintain the following items?
When you have recovered from your disability, you want to ensure that you have a practice to return to. By protecting your practice's overhead expenses as part of your insurance for dentists program, you’ll have the piece of mind – and the funds – to maintain your practice while you recuperate.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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