In the event that you become unable to work due to injury and illness, it is vital that you have a disability insurance policy set up before-hand to help you financially. There are several types of disability insurance options to choose from, some that are offered by your employer and others that can be purchased independently. Each kind of disability coverage has its own set of characteristics and benefits for the policyholder. Alexander Financial Services is here to explain the features of each type of disability insurance Greenville NC, in order for you to understand the differences so you know which policy is right for you.
This type of disability insurance will usually only pay benefits for a short period of time, such as one to two years. Its waiting period, which is the amount of time that you have to be disabled before the policy starts paying anything, may be as short as one month. Short-term disability policies are often available as an employee benefit that is free or cost a small fee that is taken out of your paycheck, and they can replace up to 80% of your gross income during the benefit period. Most short-term disability policies cost the same as long-term disability policies, so if you have sufficient savings to cover your expenses for a year or two, then this type of insurance may not be necessary.
This is the most important and most popular form of disability coverage on the market today. Most individual disability insurance requires you to be disabled for at least two years before they start paying out, but the average length of a disability is about 34 months, so this type of coverage can sustain you if you become disabled for a period of multiple years. Some long-term disability policies will pay for up to 5 years while others will pay 10 years’ worth of benefits. Some policies will even pay you until you reach retirement age, which is usually age 65. This type of insurance plan will usually pay you a maximum of 60% of your previous earnings every month, but this income is tax-free as long as you have not deducted the cost of the premiums on your tax return or your employer paid for this coverage with pretax dollars.
If you or someone you love has recently become disabled and doesn’t know where to turn, give Alexander Financial Services a call. We will work with you to get the best disability insurance Greenville NC has to offer, to help you through this often difficult time. We look forward to helping you!