Adapted for PowerPoint by Megan Maller

1
Basics of Disability Insurance

• Adapted for PowerPoint by Megan Maller

2
What is Disability Insurance?

• Disability insurance allows you to replace a
  major portion of your income if you ever become
  so sick or injured that you cannot do your job
  for a prolonged period of time.
• You can think of Disability Insurance as
  Paycheck Protection. Its purpose is to ensure
  that if the unexpected should happen, you will
  still receive a monthly income.

3
Will I need Disability Insurance

• The simple answer is yes. None of us want to
  think about the possibility of suffering from a
  disability, but the risk is real. What are the
  odds?
• An illness or accident will keep 1 in 5 workers
  out of work for at least a year before the age of
  65
• Your chance of missing at least 90 days of work
  due to a disability is just under 1 in 3
• The risk of disability is greater than the risk
  of premature death

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Risk of Disability vs. Premature Death
5
What would you do?

• If you suddenly couldnt work, how long do you
  think you could pay all your bills? Could your
  savings cover your expenses for more than 60
  days? That is assuming your disability is short
  term. What if it isnt?
• Research conducted by the Americas Health
  Insurance Plan indicates that most Americans
  cannot afford to miss more than two months of
  work without having to borrow money. However, it
  wouldnt be feasible to get approved for a loan
  without an income. What then?

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Other income options

• There are three other sources of income that may
  or may not be available to you depending on your
  situation.
• Employer-provided Disability Insurance
• Some employers provide plans to cover up to 60
  of an employees expenses up to a specified
  monthly maximum. It is, of course, not portable
  if you are forced to leave the company.
• Government Disability Insurance
• More than 60 percent of the 2.1 million people
  who applied for Social Security Disability
  Insurance (SSDI) were denied in 2005.2 Even if
  you were approved for this government program,
  SSDI benefits alone may still leave you below the
  Federal Poverty Level.
• Workers Compensation
• A good option, but the vast majority of disabling
  accidents or illnesses are not work-related, and
  therefore not covered by workers compensation

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How much does it cost?

• You would choose a disability insurance policy
  tailored to you, your unique situation and the
  amount of protection thats right for you. The
  monthly premium for a disability insurance policy
  varies based on several factors
• Type of policy selected (short-term disability
  insurance or long-term disability insurance)
• Type of disability covered accident only or
  accident and sickness policy
• Optional protection you wish to add
• for example critical illness benefit, hospital
  confinement benefit, and future insurability
  option, to name a few.
• Elimination Period you select
• Benefit Period you select
• Your age at time of purchase
• Your occupation and income
• Medical underwriting
• Of course, every person and situation is unique.
  It is important to work with a licensed insurance
  agent who can help you determine the right amount
  of coverage in a policy that will fit your
  budget.