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You work hard to provide a comfortable lifestyle for yourself and your family. But if an injury prevents you from working, will you be able to maintain your lifestyle?
“If you don’t come home and someone depends on your income to live, you need life insurance,” Mark Williams, CEO of International brokers, Insider said.
Life insurance combined with disability insurance helps manage the risk of disability, illness or death.
Insurance takes care of your projects and unforeseen events
What are your goals for your career, family, and others for whom you are responsible, even if you don’t have children?
“Ultimately, life insurance is risk management” to deal with “premature death, loss of income due to illness or disability,” according to Silvia Tergas, financial planner at Prudential.
Tergas recommends earmarking a small percentage of your income for disability and life insurance to ensure your # 1 asset: the ability to generate income in the future.
What is life insurance?
Life insurance is a contract between you and the life insurance company. You pay premiums (monthly or annually) for a payment your living parents will receive, called a death benefit. In the event of death, the insurance company pays the death benefit to the beneficiary of your choice.
There are two main types of life insurance policies: permanent life insurance and term life insurance. There are different types of term life insurance and permanent life insurance products.
Whether you choose permanent life insurance or term life insurance, you will need to go through the underwriting process. This process is how the insurance company determines your insurability – that is, how much risk you are at and how much death benefit you are eligible for.
Your life insurance needs change with age, and you’ll need to consider children, marriage, divorce, retirement, and caring for aging parents. The best life insurance for you depends on your budget as well as your financial goals.
To maximize the benefits of life insurance, it is wise to include a financial advisor, accountant, and estate lawyer in your decision-making process to ensure you have the right coverage that adapts to your changing circumstances. your life.
What is disability insurance?
When determining if you need disability insurance, the question to consider is: if you get sick or hurt, how will you earn income to pay your bills?
Disability insurance is like insurance for your salary if you are unable to work. Just like you have home insurance for your home and auto insurance for your car, you should have disability insurance to protect your income.
When you are injured or ill and unable to work, disability insurance pays you a percentage of your salary. There are two types: short term disability and long term disability.
While many people likely experience short-term disability through their employer, long-term disability insurance is what most people need and don’t have.
For most people considering disability insurance, the focus is on long term disability and how to choose between an “all job” policy and a “own job” policy. You can use online calculators to determine the amount of disability insurance you need.
Why buy life insurance and disability insurance at the same time?
According to The life of the guardian, more than one in four 20-year-olds can expect to be out of work for at least a year due to a crippling illness before retiring. Guardian Life also notes that illness causes 90% of disabilities, while injuries account for the remaining 10%.
Life insurance protects your family in the event of death. Disability insurance protects your income in the event of injury and inability to work. The worst feeling is to think that you have a blanket, only to find out that you don’t have it or that it is not enough.
Life and disability insurance require you to go through the underwriting process, which can take four to six weeks. Underwriting is when the insurance company collects information about your health, employment, income, finances, and other personal information to determine how much it will insure you and what your premium will be. This may require a medical examination, which includes taking a sample of blood and urine.
Some insurance companies offer a disability rider that you can add to your life insurance policy instead of having two separate policies. However, it may be more cost effective to have separate policies.
Talk to your insurance specialist or financial advisor to find out which options work best for your financial situation and goals.