Credit cards, personal loans, mortgages, car financing: Debt comes in many forms and, in this day and age, they’re practically a necessity to get the things we want out of life.
When life continues as normal, repaying your debts usually isn’t a problem, but what happens when something goes wrong? What happens when you’re unable to pay? As much as we’d like them to, loans don’t just simply disappear. Debts must always be repaid, in some way or another.
It’s important to protect yourself and your family when the worst happens. Here’s why you should consider disability insurance—and how to get the right coverage for the right price.
What Is Disability Insurance?
Disability insurance provides benefits to those who suddenly become disabled and, as a result of their disability, can no longer work. The most common form of disability insurance services provides a payout that’s a percentage of the claimant’s wage before they became disabled, although there are many factors that influence what the exact payout will be, including:
- Length of policy – There are short-term and long-term disability insurance policies, which will provide payouts for different lengths of time. Normally, the long-term policy will pay out a smaller percentage of your base monthly wage, but for much longer than a short-term policy.
- Waiting periods – The waiting period between injury and payout depends on the type of loan and when you got the loan. In some cases, you might get paid out instantly. In others, you might have to wait a week or more.
- Additional Benefits – Long-term disability insurance will sometimes also pay out extra benefits to the claimant—like funds for rehabilitation and retraining—so you can get a job that is compatible with your disability.
Why Do I Need It?
Most people think of a disability as something that’s life-long and permanent like the loss of a limb or becoming paraplegic, but, in insurance terms, disability usually just means the inability to work. It could just be a temporary injury or an illness that causes the loss of wages or the effects of medical conditions like stroke, heart attack, or diabetes.
In other words, it can happen to anyone at any age. Although you might have some savings, if you can’t earn a living during the period of your disability, that money can go very quickly. Besides living expenses, you still must consider:
- Medical expenses for your injury or illness
- Repayment of debts
- Paying someone to help care for you
- Retraining to find more suitable work
- Paying for dependent family members
Where to Get the Right Insurance
The main place to look for disability insurance services is with your place of work. Even if you’re not covered fully by your employer, you may be eligible for partial coverage of premiums through a sponsored plan. Even buying it voluntarily through your employer’s insurance broker is generally cheaper than trying to buy a plan by yourself.
However, if you’re not satisfied with the level of protection it affords—or you’re self-employed—the next best place to look for a discount rate is with a professional association. These associations, like those which represent workers in your line of employment or alumni groups, have group rates that are normally better than individual coverage.
Disability Debt Protection
One other thing to consider is disability debt protection or disability insurance for your bank loans. While normal disability insurance payouts can be significant, they’re still often not enough to cover every debt you have, as well as all the other ongoing expenses.
For a minimal fee that’s added to the principal loan amount, you could have coverage and peace of mind if something goes wrong. While you’re suffering from your disability, this form of disability insurance will continue to pay your loan for you, allowing you to spend any other disability insurance on more important things.
Life is full of surprises, and you need to be prepared for everything. If you’re worried about what might happen to your family, debt protection is always a great choice to put your mind at ease. To find out more about our disability insurance services and get the right advice, get in touch with an Amarillo federal credit union that cares. Get in touch with the friendly, professional team at TPFCU.