Disability Insurance

Disability Insurance Provides Income When You're Unable to Work

Disability insurance offers you a way to replace lost income when you become ill or injured and are unable to work for a long time, whether it's months, years, or even the rest of your life. It's a way to help you continue to meet your expenses while you take time to recover. Having disability insurance in place can help keep you from worrying about finding the money to pay necessary bills and help you avoid depleting your assets or savings.

When to Consider Disability Insurance

Although you may be eligible for workers' compensation, Social Security disability benefits or your state's disability program (available in very few states), you may find that the disability benefits provided through those programs will not meet your income needs. So if you don't have other sources of income (such as your spouse's income or investment income) that could help you pay bills and meet expenses through a period of disability, you may want to consider purchasing a disability insurance policy that will cover both short-term and long-term disabilities.

Some employers offer group disability insurance coverage, whether they pay the premiums for you or you pay them out of your own pocket. Your employer's disability insurance program may offer benefits at a reasonable cost. Be sure to understand and compare the costs and benefits before purchasing a short-term or long-term disability insurance policy.

Determining How Much Disability Insurance Income You Need

When you calculate how much disability income you may need in the future, it's important to factor in your current income and expenses and estimate how those amounts may rise in the future. As your Financial Advisor we can help you determine how much disability insurance coverage you need based on those and a variety of other factors.

The Taxable Status of Income From Disability Insurance

If you pay for disability insurance out of your own pocket, the disability income you receive will be tax-free. However, benefits paid from disability insurance policies paid for by your employer or received from Social Security will be subject to income tax.

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