Individual disability insurance is simply income protection. You can’t predict what your health will be in the future. You may stay active and eat healthily, but most disabilities are actually caused by unexpected illnesses, such as cancer, and accidents.

A long-term disability can have more severe consequences on a family’s expenses than the death of a provider. With the death of a provider expenses decrease because there is one less family member. If the provider is disabled, expenses increase due to the cost of providing care for the disabled person.

The purpose of disability insurance is to replace the income of the person who is now unable to work due to sickness or an accident.

Think about your current lifestyle needs and future goals. When the paychecks stop, what gets sacrificed first?

Short-term needs:

       · Mortgage/rent

· Utilities/phones

· Home maintenance

· Child-related expenses

· Transportation

· Loans/debt

· Insurance premiums

Long-term needs:

· College tuition

· Weddings

· Retirement

· Travel/leisure

Your income is your most valuable asset. It supports the lifestyle you and your family enjoy now and the financial goals you work hard to achieve.

How does disability insurance work?

If you become disabled, you will begin to receive the benefits laid out in your policy. There is often a waiting period before payments begin, however. Common waiting periods are 30, 60, 90, 180, and 365 days. A few policies are available with a 0-day waiting period but this is only for disabilities that occur from an accident.

Disability insurance policies with a shorter waiting period have higher premiums. If you have the means to pay for typical living expenses for a few months in the event of a disability, you can save money by purchasing a disability policy with a longer waiting period.

For example, the annual premium for a policy with a 180-day waiting period can be less than half the cost of a policy with a 30-day waiting period.

Just as disability insurance policies have different waiting periods, they also have different benefit periods. A benefit period is the duration of time in which an insurance company will provide funds to an individual once he or she becomes disabled. Benefit periods can include one year, 2 years, 3 years, 5 years, 10 years, to age 65 or age 67, or even the insured’s lifetime. Not all insurance companies offer all of these options.

Disability benefits will continue as long as you are disabled according to the policy’s provisions. The insurance company will most likely require proof of continued disability if the duration is long-term. The benefits from a disability policy cease once you are no longer considered disabled.

The longer your benefit period, the higher the premium. For example, the premiums for a policy with a 2-year benefit period may be 40-50% less expensive than a policy with a benefit period that goes until age 67.

Cosmo Insurance Agency is an independent insurance agency serving surrounding communities in New Jersey. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating the latest in technology-based tools and laws on healthcare, employee benefits, life insurance and finance, we keep our clients up-to-date with the plans that encompass all of their needs, whether it is individual or group insurance. 

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