Disability Insurance Protects You
Disability Insurance – Protection for You and Your Family
You worked hard to get where you are. It’s a good life but so much is riding on your income. You have to ask yourself, “If it were to go away, what would my life look like? How would I pay my bills?” Disability Insurance provides a portion of your income if you are unable to work due to illness or disability. It can be a life-saver should something unexpected happen.
Your best resource is a knowledgeable agent who does not charge you fees to provide great service. Desert Mountain Insurance can help your review and understand Disability Insurance policy coverages and exclusions. Call us or complete our questionnaire for a FREE consultation and quote!
Personal Disability Policies
- Name(s): True Own Occupation or Your Occupation or Regular Own Occupation
- This policy allows you to choose to work in another occupation than your chosen specialty while totally disabled and your benefit will not be reduced because of earnings in the new occupation, as long as the illness or injury prevents you from working in your regular occupation.
- Example: A doctor or dentist suffers an injury to their hand and cannot perform in their chosen specialty. They would be considered totally disabled and be able to collect full benefits while pursuing another occupation.
- Name(s): Transitional Own Occupation
- Transitional own-occupation coverage is own-occupation coverage with an adjusted benefit. This type of policy takes into account your earnings from the job you take while disabled. Your benefit would only be reduced if the total of all your disability benefits and current income exceeds 100% of your pre-disability earnings.
- Example: A dentist makes $8,000 per month and has a disability benefit up to $8,000 per month. He becomes disabled and takes a job as a consultant that pays him $6,500 per month. The benefits payable under the Transitional Own Occupation definition would be $1,500 per month.
- Name(s): Own Occupation or Modified Own Occupation or Any Occupation
- This policy requires that you are totally disabled due to sickness or injury, you cannot perform the duties of your regular occupation, and you are not working in any gainful occupation.
- Example: You are a dentist making $100,000 a year. You suffer an injury that prevents you from performing your usual duties. If you become employed in any way, even for a lesser income, your disability payments stop. Note: It’s important to read the policy details carefully as some any-occupation disability insurance policies state that you’ll be ineligible for disability insurance payments if you have the ability to work another occupation, regardless of whether you actually take another job.
Group Disability Policies vs. Individual Disability Policies
Some employers offer a chance to join their group disability policies and the premiums can be attractive. Here are substantial differences between group and individual disability insurance contracts to consider before you decide.
- Group Disability Insurance: The Policy is administered through the Group/Employer and can be canceled or changed at any time by them. The policy is generally not portable if you decide to leave the Group/Employer. There are restricted definitions of disability – own occupation definition is generally not included, and the premiums or benefits are considered taxable benefits.
- Individual Disability Insurance: In contrast, the policy cannot be canceled or changed as long as premiums are paid. The policy is portable no matter where you are in the country. Own Occupation disability benefits are available to age 65 or 67 and the benefits are non-taxable as long as policy premiums are paid with after-tax dollars.
Desert Mountain Insurance is an independent agency which means we are able to contact multiple carriers so you have a wider choice of options in coverage and in price. For a FREE consultation and quote, please call us or complete our questionnaire!
For more information about what you should know when purchasing a policy, see our article, “Disability Insurance – Why Do I Need It?“
If you own a medical practice or a business, the same questions apply. How would it change the business? How will we meet our operating expenses? There are business disability policies designed to help you answer these questions. They are called Business Overhead Expense (BOE) Insurance and Loan Indemnification Insurance and can be extremely important to your business’s financial security. For more information, please read our article, “Disability and Your Business”
The information provided here is subject to change without notice and should not be considered binding or all-inclusive. We strongly suggest that you review your policies carefully so you understand what is included and what is excluded.