How many of you carry Disability Insurance?

[tx2step]

How many of you carry "Disability" Insurance?

You are far more likely to be injured and disabled (either temporarily or permanently) than you are to die -- and it can be far more devastating financially.

What kind of insurance do you carry to guard against that risk?

Who is the carrier? What will it pay? For how long? What are the conditions or exclusions? How much does it cost? etc.

I'd like to get you guys thinking about it.

I'd also like to know if others have come up with something better that I've missed.

I've carried a disability policy for years. General American, now MetLife. I'm mid 50's and the premium runs about $1,600/year. It would completely replace my income (adjusted for inflation) if I'm disabled for over 90 days, and will pay as long as I'm alive or until I'm no longer disabled.

What do you guys do?

 

[hardworkingstiff]

Re: How many of you carry Disability Insurance?

Wow tx,

That's a great premium. Completely replace your income? The policies I've looked at wouldn't do that. The premiums were a lot higher too. I decided to take the money (about $2,500/year) and invest it instead. I'm completely debt free, and if I do get disabled, I have enough cash (well, I used to before the divorce started) to live a couple of years to recover. SS kicks in before then, and I could survive on the disability from that plus retirement funds.

I just don't like insurance. You never know when the company may become bankrupt (and yes, it does happen).

 

[tx2step]

Re: How many of you carry Disability Insurance?

hws -- I've had this policy for over 15 years, maybe around 18 years? That's probably why my premiums are pretty good -- they increase each year, but each year's rate was fixed when the policy was first taken out. That's probably also why the terms are pretty good. I've been told that no one writes policies like that anymore. But I haven't really checked that out.

It's certainly true that insurance companies can go belly-up -- I've seen it happen. But so can investments. In the big picture, insurance companies are pretty safe. I always check them out at: http://www.ambest.com/

You can look up the financial strength of any insurance company there. Just be sure you enter the exact name of the ins. co. you are interested in.

Ain't it the truth how divorce can change the financial landscape? It had no effect on my disability policy, though.

Medical bills can also wipe you out, too -- even with medical insurance. (Health insurance is another topic I intend to bring up in a separate post)

Also, the bankruptcy laws will change dramatically this October (for the worse).

None of this affects the disability policy, though.

Further, if you don't claim the disability ins. premium each year as a deductible business expense (IRS), then payments that you receive from the disability policy are tax free.

There is no single right answer, just educated guesses based on your evaluation of the various risks and policy pros & cons.

And when I said it would completely replace my income, that was slightly misleading. The yearly payment schedule was fixed (but it goes up each year) at the time the policy was written, plus a yearly adjustment for inflation (based on that years official gov. rate of inflation). BUT... if I were disabled right now, the policy would actually pay a little more than my normal income. I guess I over-estimated my future income levels a little when the policy was first written and the payment schedule was set up.

 

[hardworkingstiff]

Re: How many of you carry Disability Insurance?

tx,

You are one smart hombre! That was a great move with that policy.

Another reason I decided against the disability policy is that I believe most everyone that is disabled is usually able within a couple of years to return to some kind of work. I have management experience (6 years of it) in which I could be gainfully employed in an office, or a wheel chair. I did not enjoy it as much as I do working outdoors, but if you get hurt I don't think that is a consideration.

Medical insurance is going to be an issue for me soon. The cobra from my separated wife's ex job will run out in about 6 months. She got a quote for a replacement policy about 6 months ago, and it was....... $2,400/month! GEESH!

I don't know what she put down as history, but I think she made a mistake. She is in rough shape, and I'm no spring chicken, but at 2400, I think I will be self insured. I need to look into a Health Savings Account (HSA). Oh yea, I forget, she is not my problem anymore. This will be difficult to get used to.

 

[electricmanscott]

Re: How many of you carry Disability Insurance?

Originally posted by hardworkingstiff:
tx,


Another reason I decided against the disability policy is that I believe most everyone that is disabled is usually able within a couple of years to return to some kind of work. I have management experience (6 years of it) in which I could be gainfully employed in an office, or a wheel chair. I did not enjoy it as much as I do working outdoors, but if you get hurt I don't think that is a consideration.

What if you go blind or loose a limb. Disability is more than just an injury that won't allow you to climb a ladder. I have a policy and as a dad with a house, a wife and kids this is a must have.

 

[hardworkingstiff]

Re: How many of you carry Disability Insurance?

Blind or deaf would be a problem. If you are blinded, I think the with the lack of experience with that condition, a disability policy will not come close to covering the required money needed to get by.

I know I sound negative, but don't mean to. Insurance companies are getting filthy rich on the fears they push. I just analyze the fear to see how much I think protection is worth, and what is the protection I'm buying. So far, it has not seemed a "good deal" to me.

 

[electricmanscott]

Re: How many of you carry Disability Insurance?

To each their own.

 

[tx2step]

Re: How many of you carry Disability Insurance?

Don't any of you have further thoughts or opinions concerning Disability Insurance?

Pros or cons?

Sources and costs?

My brother is in his 3rd (I think) year of being an EC, and is trying to decide whether it is a good idea and trying to get a line on a good product.

Do any of you have any views, opinions, experience or suggestions?

 

[JES2727]

Re: How many of you carry Disability Insurance?

I've never given much thought to this issue. Until now. You guys have got me thinking........

John

 

[iwire]

Re: How many of you carry Disability Insurance?

The company I work for provides us short term disability insurance for free.

This came about after some employees got hurt off the job and had to miss work. The company tried to find jobs that they could do while they recovered. This turned out to be difficult so they went with the insurance.

Along with the free short term disability insurance we can opt to pay just a few dollars a week for longterm disability insurance.

Being husband and father of two young kids I do not see a choice in carrying disability insurance.

If my income was to cease all of our lives would be greatly affected.

 

[George Stolz]

Re: How many of you carry Disability Insurance?

Originally posted by tx2step:
My brother is in his 3rd (I think) year of being an EC, and is trying to decide whether it is a good idea and trying to get a line on a good product.

Do any of you have any views, opinions, experience or suggestions?

Is he solo, or does he have employees?

The company I work for offers insurance, and if declined, they offer $100/mo to use on ala carte items (basically "riders") from the insurer. I have a disability protection of some sort, probably temporary. Also a modest life-insurance policy, that would hopefully cover costs, if nothing else. A little peace of mind for no cost to me.

I think finding a good insurance agent is the best bet.

[ July 28, 2005, 07:45 AM: Message edited by: georgestolz ]

 

[tx2step]

Re: How many of you carry Disability Insurance?

Originally posted by georgestolz:
Is he solo, or does he have employees?

I think finding a good insurance agent is the best bet.

Solo, still trying out various guys, attempting to find a decent helper. He struggled some during his first year until his name got around. After he completed a few small but higher profile projects and did a good job, then demand went way up. Right now, he has a constant 2-3 week backlog and turns away work that he doesn't want to do. He's doing pretty well now.

I've been after him to consider Disability Insurance. We're in a dangerous business. If he gets hurt and can't work, he could end up living under a bridge.

This came more to light when a few weeks ago his ~21 YO step-son got his leg broken on a construction project. He was working as an insulator. About 10 sheets of sheetrock had been leaned up against a wall by some dummy. Something triggered them to fall over, and he didn't see them falling. They hit and broke his leg. He'll be off work for at least 6 months, probably more like a year.

He is covered by Workers Comp, but that's really not that great. Workers Comp has been watered down so its hard to live on and also difficult to go to really good doctors -- you have to use doctors on their approved list, and many are cheap quacks that protect the insurance company's interest. Any proposed medical care or procedure has to be approved by WC before it can be done. It's a major PITA! Workers Comp is now more about protecting the employer from liability than taking care of the employee's injury. He has moved back in with his mom and my brother. Fortunately, he is still single and has no large debts. If he had a family it would be a disaster.

Workers Comp varies from state to state, but if you are depending on it to take care of you, you would be wise to check it out thoroughly now, before you find out how much it has been watered down in your state via the influence of the insurance lobby. In Texas and Oklahoma and the other surrounding states, "reforms" have been implemented, and it isn't very good for the employee.

Being self-employed and solo, my brother is exempt from being required to carry Workers Comp and doesn't carry it. He has health insurance to cover his medical costs, but doesn't have any form of insurance that would replace his income. That's the issue.

Insurance agents are a good source, but they don't know all of the potential policies available -- just the ones they sell. And for some reason , they tend to be influenced by the commission structure of the policies that they recommend. So doing as much homework as possible beforehand is wise, I think.

What are all of you small and solo operators out there doing to cover this very real risk?

 

[brian john]

Re: How many of you carry Disability Insurance?

http://www.about-disability-insurance.com/

Basic fact you too can be homeless without some coverage.

 

[luckyshadow]

Re: How many of you carry Disability Insurance?

You bet I am covered. The company I am employed by offers it. I can even keep it and take it with me if / when I move on as long as the payments are made. I find it to be too much of a gamble right now not to have it. Truck payment , mortgage, college tuition for the next 6 years.
You can be hurt and "on your back " in a blink of an eye. I have a bad ankle because I couldn't afford to take off work for 3 to 4 months. Never again !

 

[tx2step]

Re: How many of you carry Disability Insurance?

Brian -- that is a totally awesome web site. It's excellent. Now I need to go back and reread my policy. This explains stuff that I didn't know before. Thanks for the info!

Luckyshadow -- I 100% agree with you. Be sure and read the info at the web site given by Brian. You'll probably want to look a little further at what your policy says. I know I'm going to look at mine again.

For everyone else on the forum:

What are all of you small and solo operators out there doing to cover this very real risk?

Please post what you are doing and what your thinking is concerning this issue. I think it's really important.

 

[kentirwin]

Re: How many of you carry Disability Insurance?

My employer automatically gives me short term disability coverage. Long term is optional, but I carry and pay out of pocket for that. I fractured my skull via a fall when I was a 1st year apprentice and out of work for awhile. Then 7 years ago had a stroke out a clear blue sky - neurologists thought it might be linked to the head injury years before. YES! None of us are invunerable, unless we're 18