Disability Insurance

Disability Insurance

A personal disability insurance New Jersey can mean the difference between being able to meet your living expenses or using up all your savings and going bankrupt. Let’s say, for example, that you have an accident that required several months of bed rest. Under a good coverage plan you would be able to depend on your disability checks to help maintain your home and any personal or professional obligations. Because you had the necessary insurance protection in place, you wouldn’t end up draining your savings and retirement income on hospital bills or in-home care services.

Furthermore, not everyone can count on his or her employer to provide a group disability policy. A company isn’t required by law to offer long-term disability insurance, which is why so many don’t. If your company does, it’s important to understand exactly how much reimbursement to which you’ll be entitled. Disability benefits rarely cover 100% of a worker’s income; typically they add up to around 60% of your gross salary.

Also, many people believe they can rely on Social Security Benefits as potential income. But according to the 1998 Social Security Handbook, a full five calendar months must pass before the government can provide any disability benefits. And to qualify for benefits, your disability must not only prevent you from performing any type of gainful employment, but it also must either last at least 12 months or be expected to result in death.

How much insurance is enough?       

In order to determine how much disability insurance you need we suggest that you add up your necessary monthly expenses, such as: housing, car loans, food, utilities, and childcare. After you subtract any investment income, this is the amount of coverage you will need to cover expenses in case of disability. Then add up whatever monthly long-term disability payments you would get from your employer- this amount is your income in case of disability. If your second subtotal is greater than your first, you probably have adequate coverage. But if your second subtotal is smaller than the first, you should consider this as the amount of additional monthly disability insurance coverage you will need.

Talk to an advisor about how personal disability insurance can help you meet your expenses and obligations in the event you are injured or in an accident an unable to work.