Disability Insurance

Your ability to earn an income is your most valuable asset. While many individuals insure their homes, cars, and even their lives, they often overlook the critical importance of protecting their income itself. Disability Insurance serves as this vital safeguard, providing a portion of your regular income if you become unable to work due to illness or injury. At Glangy Dixon – Well Plus Insurance, we specialize in helping individuals and businesses assess their income protection needs, navigating the complexities of disability policies to ensure you have a robust safety net when you need it most.

The statistics are sobering: a significant percentage of working adults will experience a long-term disability before retirement, and many more will face a short-term disability. Illnesses like cancer, heart disease, or back problems, as well as accidents, can strike unexpectedly, rendering you unable to perform your job. Without disability insurance, a prolonged absence from work means a sudden and potentially devastating loss of income, impacting your ability to pay bills, cover living expenses, and save for the future. Savings can quickly evaporate, leading to financial hardship and stress during an already challenging time.

Disability insurance generally falls into two main categories:

1. Short-Term Disability (STD) Insurance:

• Purpose: Replaces a percentage of your income for a limited period, typically ranging from 3 to 6 months, and rarely extending beyond one year.
• Waiting Period: Often has a short waiting period (elimination period) before benefits begin, typically 0 to 14 days.
• Common Use: Covers temporary conditions like maternity leave, recovery from surgery, or short-term illnesses and injuries that prevent you from working.
• Availability: Often provided by employers as part of a group benefits package, but individual policies are also available.

1. Long-Term Disability (LTD) Insurance:

• Purpose: Designed to replace a portion of your income for an extended period, potentially lasting several years, up to retirement age, or even for life, depending on the policy.
• Waiting Period: Has a longer waiting period before benefits begin, typically 90 to 180 days, designed to bridge the gap after short-term disability benefits (if any) or savings are exhausted.
• Common Use: Protects against severe, prolonged illnesses or injuries that prevent you from working for an extended duration, such as chronic conditions, severe accidents, or debilitating illnesses.
• Availability: Can be purchased individually (often providing more robust coverage) or through a group plan from an employer.

When Glangy Dixon – Well Plus Insurance helps you select a disability policy, we focus on several crucial features and definitions that significantly impact the policy’s effectiveness:

• Definition of Disability: This is perhaps the most critical component.
  • “Own Occupation” Disability: The gold standard, this definition means you are considered disabled if you cannot perform the duties of your specific occupation, even if you could perform another type of job. This is particularly important for highly specialized professionals (e.g., surgeons, dentists, pilots) whose income depends on specific skills.
  • “Any Occupation” Disability: A more restrictive definition, meaning you are considered disabled only if you cannot perform the duties of any occupation for which you are reasonably suited by education, training, or experience. This makes it harder to qualify for benefits.
  • Modified Own Occupation: A hybrid that starts with “own occupation” but might switch to “any occupation” after a certain period.
    We prioritize finding policies with the strongest “own occupation” definition for individual policies, where available and suitable.
• Benefit Amount: Typically, policies replace 60-70% of your gross income. We help you calculate an appropriate amount that covers your essential living expenses (mortgage, utilities, food, debt payments) while allowing for some discretion.
• Benefit Period: How long benefits will be paid (e.g., 2 years, 5 years, to age 65, or for life).
• Elimination Period: The waiting period before benefits start (e.g., 30, 60, 90, 180 days). A longer elimination period usually results in lower premiums.
• Riders (Optional Add-ons):
  • Cost-of-Living Adjustment (COLA) Rider: Increases your benefit annually during a long-term claim to keep pace with inflation.
  • Future Increase Option (FIO) Rider: Allows you to increase your coverage amount in the future without additional medical underwriting, beneficial as your income grows.
  • Residual Disability Rider: Provides a partial benefit if you can work part-time but are earning less due to your disability.
  • Non-Cancellable and Guaranteed Renewable: Guarantees that the insurer cannot cancel your policy or raise your premiums (unless you increase coverage) as long as you pay your premiums. This provides maximum security.

Individual vs. Group Disability Insurance:
While group plans offered by employers are a good start, they often provide “any occupation” definitions, are not portable if you leave the company, and may offer less comprehensive coverage than individual policies. Individual disability insurance, while typically more expensive, offers stronger definitions of disability, is portable, and often includes more robust riders and benefits. We help self-employed individuals, business owners, and those seeking to supplement their group coverage find tailored individual policies.

Tax Implications:
Understanding the taxability of benefits is crucial. If you pay the premiums with after-tax dollars, the benefits you receive are generally tax-free. If your employer pays the premiums (and does not include them as taxable income to you), the benefits are typically taxable. We advise on these implications to ensure your financial planning is sound.

Our process at Glangy Dixon – Well Plus Insurance involves a comprehensive review of your financial situation, existing coverage, and career trajectory. We work with top-rated disability insurance carriers to present you with a range of customized options, ensuring you select a policy that provides robust income protection tailored to your unique needs. Don’t leave your financial future to chance; secure your most valuable asset – your income – with a well-designed disability insurance policy. Let us help you build a resilient financial foundation for life’s unexpected challenges.