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Disability Insurance - The Recovery Benefit

Published Monday, October 27, 2008 by bloggerblognet22596 | E-mail this post

Protect Your Income
The two most common reasons people buy individual disability insurance are to protect their income, and to protect their family. Many times doing one accomplishes the other, but if you are one of the people who thinks that just because you bought an individual disability insurance policy that you have done the job of protecting your income and your family, you may be sadly mistaken.

Your income probably took a long time to grow, and to reach the level it is today. You probably made more this year than you did last year, and while most high quality disability insurance policies do a good job of paying you if you can't work because of a long term disability, only a select few continue to protect your income after you recover from a long term disability.

Think about it, if you were out of work for 6 months to a year, and then magically recovered, how long would it take you to get back to your current level of income?

The Recovery Benefit
A disability insurance policy can pay you while you are unable to work because of a sickness or injury, but only a select few of them do an adequate job of continuing to pay you benefits even after you recover from your sickness or injury until your income financially recovers. Many of us took years to get where we are today, and unfortunately not all of us can survive being out of commission for 6 months to a year, and then just jump back in to where we were prior to becoming disabled. It may take years to rebuild your business back to where you once were.

Too many disability insurance policies only pay you while you are sick or injured, and then give you a small token recovery benefit once you have physically recovered. If you were making $150,000 a year as a dentist, and were disabled for a year, when you come back to work you are going to have to rebuild. It is not like your patients can wait for you to come back to work, they probably found another dentist. The same can be said for most fee for service professionals. If it took you ten years to build your current business, what makes you think that after being disabled for a year that you'll be able to pick back up where you left off. It may take another 10 years just to get back to where you were prior to being disabled.

To adequately protect your income, which was your original motivation, you need an individual disability insurance policy that will continue to pay you residual disability benefits until your income financially recovers, not just until you physically recover. There are only three carriers in the individual disability insurance marketplace that have the ability to do this today, make sure that the policy you own has a recovery benefit for the entire benefit period, and that there is no loss of time or duties requirement in the definition of residual disability.

Steve Crawford is a disability insurance specialist with Guardian Disability Insurance Brokerage in Rockville, MD. They have been focused on selling individual DI to consumers over the internet since 2000.

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Disability Insurance - The Recovery Benefit

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