When Disability Strikes, Know What Protections You Have
Few people expect to become disabled as a result of illness or injury, but statistics show it happens all too often. Two out of every 10 Americans will be disabled at some point in their lives, according to the Center for Independent Living. This, in turn, can affect your income and ability to meet financial obligations.
You do have some protections if you become disabled, but you must be the one to take advantage of them. Until you file a claim indicating you are disabled, insurance companies and others aren’t aware of it. Here are a few tips:
- Does your life insurance policy have an optional waiver of premium clause? Check with your insurance agent. If you have this waiver, you will not have to pay the monthly premiums while you’re unable to work. When taking out a life insurance policy, ask about this clause. Some policies pay out only if you can’t perform any occupation. Look for one in which this clause goes into effect if you can’t perform your own occupation. Prices vary according to your age, sex, state of health and occupation.
- Do you have payment protection insurance on outstanding loans? Credit life and credit disability insurance are payment protection coverages that can provide a valuable safety net if you are uninsured or underinsured. Talk to your creditors to see what other options may be available to you if you become disabled and unable to make payments temporarily.
- Find out how much of your income would be replaced through employer-provided disability insurance coverage and for how long. If you find it would be inadequate, consider disability insurance that replaces part of your earned income (usually 50 to 70 percent). Don’t count on Social Security, which pays benefits only under strict definitions of disability, making it very difficult to qualify for even limited benefits.
- Check into your rights and obligations through the Americans with Disabilities Act and the Family Medical Leave Act.