Why Do You Need Disability Insurance?

If you have a disability, it might be necessary to buy disability insurance. These five questions can help you determine if this is the case.

1. Do You Have Some Type of Income Replacement Insurance? This is the most important question of all. If the answer is yes, then you do not need disability insurance. You are already taken care of. There is no need for any additional protection. On the other hand, if the answer is no, then you need disability insurance. It’s vital that you understand this distinction. Here’s why: Even though you don’t currently have an income replacement benefit, you might one day find yourself totally unable to work and thus needing this type of protection. Therefore, it is absolutely crucial that you always keep an open mind when you are going through the claims process.
2. Do You Have Dependents? If you have children or other family members who depend on you for financial support, then you should seriously consider buying disability insurance. After all, if you become disabled, how will your family be financially supported? Will they be able to stay in their homes and continue to receive their property tax bill? Will they be able to pay their utilities and other home-related bills? Will they have any money to buy groceries? The answers to these questions could literally mean the difference between your family staying in their home and going homeless on the streets. Additionally, if any of your family members are under the age of 26, they might very well end up having to support themselves and their family until they reach the age of 26. This would be a tremendous burden for them, both financially and emotionally.
3. Do You Have Social Security Retirement Benefits? If so, it’s probably not a good idea for you to purchase income replacement insurance because you already have this type of insurance. After all, you’ve paid into Social Security all your working life. Thus, to also pay an additional premium to buy income replacement insurance is double dipping. This is not a good idea. What you should do is to convert your existing SSDI or Social Security retirement benefits into an annuity. Then, you’ll have an immediate income stream that will replace about 95% of your previous income. You can do this by contacting any qualified financial planner or insurance agent.
4. Do You Own Assets That Must Be Protected? If so, you should seriously consider purchasing some form of asset protection. The primary forms of asset protection are a trust (Irrevocable Trust), an LLC (Limited Liability Company) and a corporation. An irrevocable trust is usually the cheapest and most effective type of asset protection available. It works like a big trust with many small trusts. For example, if you and your spouse each had an irrevocable trust, each of your trusts would contain all of your property and assets. Then, the trustee in charge of managing your trust would be prohibited from selling your property or using your money for anything other than paying your living expenses and the debts and liabilities incurred by your trust. An LLC or corporation is more flexible and offers more protection than an irrevocable trust. This is especially true if you have highly-asset-protected properties that must be protected from judgment-proofing.

But it is important to keep in mind that different people, different states, and situations could have an effect on whether you need disability insurance or not. If you answered yes to any of the questions above or if you are not sure, then it is best to talk to professionals like Healthbridge Insurance. Contact us today to get expert and actionable advice.