HUNTSVILLE, Ala. (WAFF) – Disability insurance is a safety net that’s often overlooked, but it can help replace a portion of your income when you can’t work because of illness or injury.
Financial expert, Marshall Clay from The Welch Group, explained how having this type of insurance will put money into your bank account.
“Disability insurance is all about the risk of injuries that can prevent you from doing the job that you’re otherwise accustomed to doing,” Clay said.
Clay said many people make the mistake of focusing only on life insurance and that they should think more about disability insurance.
“It’s a higher probability that you’re going to have some sort of disability as opposed to a premature death,” Clay said.
There are two types of disability insurance: short-term disability and long-term disability.
Short-term will cover you for a couple of months while you are unable to work. Long-term disability insurance typically involves a more serious accident or illness that prevents you from doing your job for a long period of time.
Clay said employers typically offer some type of built-in disability policies as an employee benefit.
“But the employee actually pays it,” Clay said about built-in disability policies.
There also an option to purchase a private policy on your own. The coverage can then be broken down further to what’s called “own-occupation” and “any-occupation policies.”
“An own-occupation policy is going to cover you if you can’t perform the specific job that you were working in before you were disabled,” Clay said.
This coverage is typically more expensive because there’s a higher probability the insurance company’s going to have to cover you. Clay said these policies typically last until one is in their mid-60s.
For more ways to stay financially savvy, visit The Welch Group’s website.
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