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I am a financial planner and I have a simple guideline to find out who needs disability insurance



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I want to be honest with you: I love most insurance policies.

Insurance policies can be extremely expensive, and they all represent something you may need to have, but hope to never use ̵

1; because if you need it, something went wrong.

Take, for example, life insurance. You may need it … but if you have to use it, it means you are no longer with us. And most of us can agree that it is not an ideal result.

As much as I do not love insurance, the insurance in question for you can help protect yourself, your assets or your loved ones – or, in the event of disability insurance, possibly all three.

What is the purpose of disability insurance?

Should you experience an accident, injury or health problem that made it impossible for you to continue working, the disability benefit could protect you from loss of income despite the inability to make money.

When in your working years, earnings are probably the most valuable asset to your name. After all, you have to make money to have money to save and invest to meet goals and build financial security or achieve full financial independence.

Take away your ability to make money and the opportunity to fund your life now or in the future goes with it. This is where disability insurance comes into play.

If you experienced a disability, a disability insurance would provide you with a monthly income for a specified period of time. The amount you receive and how long depends on the details of your current earnings, the policy you receive and how much coverage you choose to receive.

Policygenius can help you compare disability insurance to find the right coverage for you, at the right price »

The Golden Rule for Who Needs Disability Insurance

Life Insurance is designed to protect people in your life who can be financially dependent on you; It is for those who will have financial difficulties if something happened to you.

Disability insurance is a little different in that it primarily protects you . If you could not work and earn a paycheck, you would have your disability to provide you with a revenue stream.

But that, in turn, can also help protect others in your life as a spouse if you are part of a two-income household and rely on your financial contribution to pay expenses and meet your savings goals. It can also protect your children because it means that money will continue to flow into your household even if you can't work.

So if you have a working income, you probably need some amount of disability insurance to protect that asset: your ability to generate positive cash flow.

How much disability, what type (short-term versus long-term, or both), and when the benefit kicks in all depends on the unique and specific factors of your financial life, goals and needs.

Where To Get Coverage

A good first step to getting disability insurance is to check with your employer or your HR department. Many companies offer group insurance that you can buy for a fraction of the cost of a private insurance that you need to buy on your own.

However, employer plans are usually quite limited and may not be sufficient for your needs. And if you are self-employed? You must definitely look into protecting yourself with your own policies.

If you feel you need more insurance than you can get through the employer's plan (or you are your employer), you may want to talk to a financial planner who is just a fee.

These professionals cannot sell insurance because they do not sell products – which is why they are a good resource to use first. They have no financial incentive to sell you more insurance than you need, and they can provide you with a comprehensive, comprehensive financial plan that takes into account your entire financial picture.

From there, they can help you identify where there may be gaps in your current coverage (or confirm that what you have is sufficient), and most planners will also be able to associate you with a contact they trust to help you Get a private policy if you need it.

Policygenius can help you compare disability insurance to find the right coverage for you, at the right price »

Eric Roberge, CFP, is the founder of Beyond Your Hammock.

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