3 Key Questions When Reviewing Your Disability Insurance:
1. Is my group disability coverage enough?
A comprehensive analysis would be needed to say for sure, but often a group disability plan will not provide adequate income replacement in the event of an extended disability. Key areas to review, aside from the monthly benefit, would be the “own occupation” period, benefit duration, and the definition of disability. Individual polices tend to have more lenient provisions in these categories.
2. How often should I review my disability insurance coverage?
At minimum, every few years and at key life changes. It’s important to think about what has changed in my life since the last time I reviewed my coverage. These changes could include things like marriage, children, and changes in income and/or lifestyle. If things have changed, it’s important to revisit this.
3. Should I buy life insurance or disability insurance first?
This one is tricky because you likely need both. While it’s very common for most of us to buy life insurance once we get married or have children, people should not overlook the importance of disability insurance. One of the primary reasons people buy life insurance is to replace the lost income in case a loved one passes away prematurely. It’s equally important to have disability insurance to protect that income in the event you’re not able to work due to an accident or illness. It’s important to remember most of your future goals and dreams will be funded by your income, so any loss of that income, either by death or disability, could be catastrophic.
Due the complexity around disability coverage, many people (and some advisors), don’t spend as much time reviewing this as they should. If you are unsure or concerned about how much disability coverage you have or if it’s adequate, give us a call and we can review it.
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