Insurance World

If you and your loved ones depend on your salary for support, then you probably need long term disability income insurance.

Think about it: if you were to become disabled, even for a few months, how would you and your family manage? Who would pay your bills? Disabling illness or injury is one of the leading causes of bankruptcy in the United States.

Most people do not realize that their chances of becoming disabled are greater than their chances of dying prematurely. Yet they are more likely to buy life insurance than disability insurance. For this reason, people in the insurance industry call disability “the forgotten risk.’ According to statistics from the Journal of the American Society of Chartered Life Underwriters, if you are age thirty to fifty-five, your chances of becoming disabled are two to three times greater than your chances of dying.

If you are thirty-five years old, you have a 50:50 chance of experiencing a disability lasting last three months or longer before you retire. One in seven workers will become disabled for more than five years before he or she reaches age 65.

Many people mistakenly believe that the government or Worker’s Compensation will pay them an income if they become disabled. Actually, more than 80% of the people who apply for Social Security disability benefits are rejected. Social Security does not pay benefits for partial or short-term disability. Your disability has to either last a year or be expected to last a year before you can collect Social Security. Worker’s Compensation pays only if you were injured on the job and benefits are often limited to a few years.

Your health insurance will cover your hospital, doctor and other medical bills, but you will still not have a salary. Long-term care insurance only covers bills from nursing homes or assisted care center. Disability insurance, however, does not pay bills. Instead the insurance company gives you money on a regular basis. It is designed to replace your salary so that you and your family will not experience financial hardship during any period when you are too sick or injured to work.

What should you look for when you are buying long term disability insurance? First, the insurance company itself should have a top rating from Moody’s, A.M. Best, and Standard and Poor. These agencies rate companies in terms of capitalization, growth, earnings and other indicators of financial stability.

Secondly, you should make sure you understand the terms of your policy. Some policies require a waiting period before you start receiving benefits. For example, your policy may have a six-month waiting period before benefits are paid. In this case, your benefits would begin six months from the time of disability.

The waiting period is often called the elimination period. Choices usually range from 30 days to 720 days.

Look for a waiver of premium provision. This means if you become disabled, you will not have to keep paying for your disability policy.

What are the conditions for renewing the policy? If you’re policy is not automatically renewable, the insurance company has the right to cancel it.

Payment period options are another consideration. Some policies will only pay for a certain period of time, sometimes for only two years. Other policies last a lifetime. The most popular policies pay benefits until you reach retirement age, when you can begin to collect Social Security payments.

Most policies have a residual disability clause. If you suffer a disability, very often you will return to work part-time at first. Or because you were off work for a while, it may take you time to build your business back to the level it was before you became disabled. Your insurance should provide income for both these scenarios.

Check over the policy for a recurrent disabilities benefit. A recurrent disability is one that happens after you recover from your original disability. Your insurance should waive a new waiting period and/or not require proof that the two disabilities were related.

When you buy disability insurance, you buy it according to your income level. The more money you make, the larger the benefit of your policy. But you also have to figure that your income will rise as you get older. For this reason you want a future increase rider or automatic increase rider. These riders allow you to keep your policy but increase the amount of your benefits based on your increased earnings as you grow older.

When you buy your insurance, certain factors will affect your price. You will pay less for the insurance if you decide to replace 50% of your income instead of 80%. You also pay less if you opt for a longer elimination period. The insurance company factors in your current health and may exclude preexisting conditions. Women and smokers may pay more for disability insurance because they make more claims than non-smoking males. If you are in a high-risk job, your policy may cost you more.

Disability insurance policies can be confusing. It is always best to sit down with a professional insurance agent to discuss the terms of the policy together and to ask questions until you completely understand the details of the policy quotes being presented.

When it comes to the mandatory car insurance categories, people in Charlotte, often settle for the minimum amount necessary to satisfy the legal requirements of driving a car in North Carolina.

Tragically, this is sometimes the cause of much suffering and heartache if the unthinkable should happen, and they become involved in an automobile accident in Charlotte, without sufficient insurance coverage to cover the damages and injuries that could result.

The focus of this article is uninsured motorist coverage (often referred to as UM coverage) and underinsured motorist coverage (often referred to as UIM coverage), which is not a legal requirement of every state, but should be seriously considered by every driver where this is an option.

Uninsured motorist coverage kicks in when an uninsured driver causes injury to you, or others designated in your policy. (Such as passengers, household residents and designated drivers.) Underinsured motorist coverage is similar, but takes effect when someone who is insured and is legally responsible for the accident that causes injury to you or others designated by your policy, does not have sufficient bodily injury liability insurance to cover the full cost of your medical bills, lost income and other expenses. (Be sure to read and understand the fine print on your policy, as each insurance company often offers something slightly different from another.)

These types of coverage also offer protection to you and your designates in cases of hit-and-run type accidents and injuries that could be sustained as a pedestrian involved in an automobile accident. UM and UIM insurance coverage will protect you, up to the coverage limit that you purchase.

An important point to mention is that uninsured and underinsured motorist insurance usually deals specifically with injuries and not with vehicle and property damage resulting from an uninsured or underinsured driver who is at-fault in an accident. Some states do allow uninsured motorist property damage coverage, but damage to your car would typically be covered by collision coverage and damage to other property by Property Damage Liability insurance.

There are several reasons that drivers in Charlotte should seriously consider adding this kind of insurance protection or even increasing it if you already have it.

Consider the following scenarios, and ask yourself what impact a similar event would have on your life, your family’s lives and your financial well being:

A)
Many drivers in Charlotte, seeking to save money on their insurance costs opt for the minimum amount of auto insurance required by law. Unfortunately, one of these minimally insured drivers is the cause of a serious accident involving you and your family. After exhausting the limits of their coverage, you are still out of pocket for a large sum of money for your medical expenses, not to mention lost wages and pain and suffering. You sue the other party and win, but you find out that one of the reasons that they have the minimal insurance coverage is because they have no financial resources to speak of.
B)
You’re driving home from a short weekend getaway with your spouse and kids. It’s become dark outside and has begun to rain quite hard. Being the conscientious driver that you are, you slow down and make sure that you come to a full stop at all stop signs and traffic lights, being careful to check for oncoming traffic before going through intersections. Halfway through one such intersection, your vehicle is violently impacted and that is the last thing you remember. When you come to, there is initially no one around to witness the carnage. The other vehicle that was being driven without their lights on and by a thoroughly drunk driver is nowhere to be found. You are the victim of a hit-and-run accident. There is no one to sue for your losses.

While we sincerely hope nothing of the sort ever happens to you, in both of the above scenarios, Underinsured and Uninsured motorist coverage would be there to help, where (depending on the state) the terms of basic auto insurance would likely leave you in an extremely severe financial situation.

Thankfully, adding Underinsured and Uninsured motorist coverage will not typically add that much extra to your auto insurance bill in Charlotte. And, for this small additional cost to your premium each month, you can rest easier knowing that you and the people you care about are as well protected from disaster on the roads and highways of North Carolina as you can reasonably plan for.

Kate Phillips is a contributing writer at kanetix.com, Serving Charlotte car insurance quotes / Auto insurance quotes Charlotte. For the Car Insurance Charlotte Needs, visit kanetix for Free Quotes