Nobody ever wants to think that they will become disabled, but it can, and does, happen to hundreds of people every year for one reason or another. A major concern for many people is loss of income, and this unfortunately happens a lot when someone becomes sick, injured or otherwise physically disabled. After all, life doesn’t stop when you do. However, this doesn’t mean that you and your family need to fall behind.
Life insurance is primarily there to protect your loved ones when you die, but when you become disabled and are unable to work, both you and them can become equally disadvantaged financially. Having a disability income rider on your policy will help you maintain your coverage even if something should happen to you that prevents you from maintaining your standard of living while you are still alive.
By having a disability income rider on your policy, you are protected. With this, you receive a monthly income (or just a waiver of premium as seen in the next section) as long as you meet the requirements for disability in your policy. This income is often 1 percent of the policy’s value—someone with a $250,000 policy would receive $2,500. Depending on your policy’s terms, you may have to be disabled for a certain period of time before you are able to request your disability income.
Waiver of Premium
A “waiver of premium” is worth getting on your policy as well, as it goes hand in hand with the disability income rider. This allows you to stop paying your premium rates should you become disabled. This rider stipulates that you will not be required to keep paying your premiums once you have been disabled for a certain period of time and are unable to work. When you are later able to return to work full-time, only then will you be required to begin paying your premiums again.
Effect on Income
Since you are not able to work as you usually do, your income should already be severely reduced. The money released to you when you use your disability income rider is meant to be a reasonable replacement for that lost income and may be subject to income tax. However, this tax is usually not applicable as long as the premium is paid.
It should also be noted that accepting this rider could also have an effect on any Medicare or social security payments you may receive (either your insurance benefits or your Medicaid/social security could be reduced to accommodate the other).
Everyone Should Consider It
Though it may seem like just another insurance company ploy to suck money out of you, the truth is that your risk of becoming disabled before you reach retirement age is a lot higher than you may think it is. In fact, Studies show that the average 20-year-old worker of today has a 1-in-4 chance of becoming disabled before they reach their late 60s (retirement age). Getting a disability income rider on your policy is cheap compared to what a total loss of income could cost you, and it keeps both you and your family members protected.
We are prepared to answer all of your questions about disability income riders, and we will work to find you the best rates possible.
Ready to take the next step? Contact us today by calling at 888-411-1329, or fill out our quote form below. We look forward to helping you.