20/20 Mortgage Life Insurance is proud to offer supplemental coverage to our mortgage life insurance policies in the form of a disability rider. You may not be familiar with disability insurance, so we’d like to offer this primer.
What Is Disability Insurance?
Disability insurance is coverage paid to you in the event you become unable to maintain employment due to an illness or injury for longer than sixty days. It is offered through many employers and also privately through health and life insurance agents like 20/20 Mortgage Life Insurance. A claim will be paid out whether the disability is temporary, until you return to work, or permanent, although the benefit typically will not be paid after twenty-four months, regardless of your ability to return to work.
Length Of Coverage
Short-term and long-term disability coverage both exist. Short-term usually pays out for up to six months. Long-term can extend up to two years. Some insurers require you to go to physical therapy or other rehabilitation and work towards resuming employment in order to maintain coverage. Individual policies do exist that will maintain coverage until retirement age in some cases.
Occupation Terms
Different insurance companies may define a disability differently. It is important to note if the plan covers you if you are unable to maintain any occupation or your “regular or own” occupation. Many insurance companies will pay out only if you are unable to do any work, while others will still pay if you can work in a capacity different from the one you were employed doing, though typically at reduced benefit. The latter plan typically costs more but may be beneficial if your ability to do other work would require a significant pay cut and you wouldn’t qualify for a claim with an “any occupation” term. Keep in mind, however, that sometimes an “own” occupation policy will change to an “any” occupation policy after a set period of coverage.
Who Needs Disability Insurance?
Frankly, everyone. If you’re under 50, your greatest asset may be your future earnings potential. When people imagine their future, it’s largely contingent on their ability to maintain income, and often that ability is never questioned. Except it should be. Estimates put your odds at becoming unable to work at some point in your life at around one in three. 90% of disability is caused by illness rather than injury, so if you’re in a “low-risk” job it might still behoove you to consider disability insurance. Those illnesses are often common ones, like arthritis, depression, heart disease, diabetes, cancer, and back pain.
If you become disabled, in addition to still needing to pay your regular bills, you may also need to modify your home or lifestyle, and incur medical bills. You’d need a significant emergency fund to manage without income. Disability insurance typically covers between 60-85% of your prior income.
The time to arrange disability insurance is now. You’ll be more likely to qualify before you need it, including in terms of pregnancy and maternity leave. Also if your policy is income-based, if you have taken sick leave or time off it will affect your future coverage payouts.
20/20 Mortgage Life Insurance Disability Coverage
Because our disability rider is tied to a mortgage life insurance policy, 20/20 works a little differently. You will receive a monthly benefit payment equal to your monthly mortgage payment at the time of your application, up to maximum of $3,000. Your monthly benefit payment will continue each month provided you remain totally disabled and up to a maximum of 24 months. The monthly benefit will not be reduced if you pay off your mortgage. You can use the monthly payment for any purpose while you recover.
20/20 Mortgage Life + Disability includes at no extra charge a Disability Waiver of Premium benefit. This means that if you become disabled when the policy is in force no life or disability premiums will be payable while you are receiving Disability Benefits, following a 60-day waiting period.
Contact Us
If you’re interested in protecting your biggest liability, your home, or your biggest asset, your health, contact us today to discuss your optionsand get a quote.
