Insure Your Income

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life insurance

As we continue to make sure the most important things are protected against life’s contingencies, I want discuss everyone’s most important attribute: the ability to produce an income.

When we think about insurance, it is usually the forms that are required. State law requires auto liability insurance. Lienholders require comprehensive and collision coverage on vehicles that are financed. Mortgage companies require hazard (property) insurance to protect their interests where they have loaned money for properties to be purchased. For other purchases, such as boats, motorcycles, all-terrain vehicles, farm and contractors’ equipment, motorhomes and recreational trailers, jewelry, guns, and more, we also take out insurance. But many fail to insure the one thing that allows us the opportunity to purchase all of our possessions – our incomes! As a result, so many hopes and dreams go unfulfilled because of the death or disability of a primary wage earner.

No one likes to think about becoming disabled or passing away unexpectedly, but the unfortunate thing is that the chance of an accident or unexpected illness is present every day of our lives. Because of that probability, everyone needs to consider purchasing disability and life insurance.

Here is a quick overview of the two types of disability insurance. Short-term disability provides an income benefit for a specific number of days ranging from 30 to 365. Long-term disability typically would be for a period of two years, five years or to age 65 depending upon your occupation. After selecting the type of coverage, the amount of income protection needs to be determined, with the maximum being approximately two-thirds of your gross income. Both types have a waiting or elimination period, a specific number of days that must pass before benefits begin. The premium for each type is based on occupation, amount of income protection, elimination period and length of time the benefit will be paid. Group rates tend to be cheaper than those in the individual market, so check to see if disability is a benefit offered by your employer.

There is a qualification process for disability insurance that requires the completion of an application and most likely a physical examination. The insurance company will evaluate the applicant’s health and make an underwriting decision on whether or not to offer coverage. Group policies may have less stringent underwriting guidelines. Health is what buys this product; money is what pays for the insurance.

Contact your local Farm Bureau agent for more details on disability insurance because you and your loved ones are depending on your income.

– Allan Williams

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