July 9, 2019
Open enrollment for employer-paid health insurance will be here before you know it. Each year brings new changes to plans so it’s important that you review your options and let your Valeri Agency specialist provide assistance.
When most people rank their most important financial asset, they tend to think of their home, their car or their life. But in reality, your most significant asset is your opportunity to work and earn a salary. Statistics show that there is a 30% chance that you will become disabled for more than three months during your lifetime.*
The vast majority of disabilities (90%) are caused by illness and are not work-related - and thus, not covered by workers compensation policies. The biggest threat to bringing home a paycheck is a debilitating illness or a disability caused by illness. That’s why maintaining an individual long-term disability policy is so vital to protecting yourself and your ability to earn income.
If you opt for an employer-paid disability policy, those will typically cover 13-26 weeks of paid medical leave. Typically, employees receive 50-70% of pre-disability gross salary through long-term disability coverage. However, the pay received is considered taxable income. There can also be a waiting period of up to six months before disability coverage takes effect for new employees.
To cover that time period, and to enhance your disability coverage, an individual policy can be purchased. In addition: if you purchase an individual short- or long-term disability policy, and become disabled, the funds received from the policy are not taxed. Carriers will inquire about your job title, duties and ask about personal safety habits to determine your coverage level and rate.
No matter what your age, it is recommended that consumers purchase as much disability coverage as possible, starting with any that is employer-paid. You can fill the rest in with individual coverage, with the goal being that your entire regular salary is received in the event of long-term illness. As noted above, many employers require a waiting period for new employees before their disability coverage is active. In general, the shorter the waiting period, the higher the premium. The longer the waiting period, the shorter the premium.
Long-term disability coverage can be complicated but is also a very wise investment for employees of all ages. Contact the Valeri Agency today to discuss your options; let us help you prepare and plan for the unexpected.