The cost of disability insurance is dependent on gender, age, smoking status and health condition. The first step is to determine your legitimate earnings to establish your compensation. Then you have an important decision to make: pay the premium after tax for a tax free benefit of up to 60% of your compensation or pay the premium pretax for a taxable benefit up to 80% of your compensation, provided that you have ability to use the premium as a legitimate business deduction. Depending upon your gender, age, nonsmoking status and good health condition you should be ready to pay 5 to 8% of your compensation.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Disability insurance depends on a number of factors. The cost (your premium) is based on a number of factors - the most important being your medical history, your job, and your income - and the policies are very customizable.
This is a very important type of coverage to have that many don't think about. It protects one of your greatest assets - your ability to work. If you can't work because of an injury or illness, how do you provide income for you and your family. The answer? Your disability insurance.
When you're buying a disability policy, the MOST important factor in the policy structure is the DEFINITION OF DISABILITY. Each policy will use 1 of the 3 definitions:
1) True Own Occupation - this says you are considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation, even if you are at work in another occupation. In short, this is the most favorable definition you can have.
2) Modified Own Occupation - this says that you are considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation. This one is commonly seen in many individual disability insurance policies.
3) Gainful Occupation - this says if you are unable to perform the duties of your occupation or any occupation for which you are qualified for by education, training, or experience due to sickness or injury. In short, this is the least favorable definition. This one is commonly seen in group disability insurance policies through an employer and property and casualty insurers that offer disability coverage.
There are many moving parts to disability insurance and is not something I would suggest trying to buy on your own - this is a type of coverage you should consult with an experienced independent disability insurance broker about.
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much.
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This is a very important type of coverage to have that many don't think about. It protects one of your greatest assets - your ability to work. If you can't work because of an injury or illness, how do you provide income for you and your family. The answer? Your disability insurance.
When you're buying a disability policy, the MOST important factor in the policy structure is the DEFINITION OF DISABILITY. Each policy will use 1 of the 3 definitions:
1) True Own Occupation - this says you are considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation, even if you are at work in another occupation. In short, this is the most favorable definition you can have.
2) Modified Own Occupation - this says that you are considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation. This one is commonly seen in many individual disability insurance policies.
3) Gainful Occupation - this says if you are unable to perform the duties of your occupation or any occupation for which you are qualified for by education, training, or experience due to sickness or injury. In short, this is the least favorable definition. This one is commonly seen in group disability insurance policies through an employer and property and casualty insurers that offer disability coverage.
There are many moving parts to disability insurance and is not something I would suggest trying to buy on your own - this is a type of coverage you should consult with an experienced independent disability insurance broker about.
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much.