Wednesday, April 13, 2011

What Are the Benefits of Disability and Life Insurance Programs?

Insurance is intended to provide protection against unforeseen losses. While some types of insurance are required by law, many others are not. Protecting yourself and your family from detrimental financial loss is imperative. Life and disability insurance are perhaps the two most important types of policies used to protect your ability to generate an income for your family. If you get injured or killed, these policies will provide the funds necessary to maintain your household.

Life Insurance


Life insurance provides your heirs with a lump sum if you die. Multiple types of policies exist, each with varying degrees of coverage. Your situation determines what life insurance product is best suited to your individual needs, goals and available budget. Some life insurance policies expire after a number of years, while others last forever. Not all products are appropriate for everyone, and choosing the right one is essential to properly protecting your family.

Disability Insurance


Disability insurance pays you a monthly benefit if you get injured and cannot work. These policies provide essential benefits that may prevent you and your family from experiencing financial disaster. Disability products can be customized and tailored to provide precise protection at affordable rates. Benefits are typically free of federal income taxes, and will continue until you are healed, or until you exhaust your coverage.

Income Replacement


Both disability insurance and life insurance may serve a common purpose -- income replacement. If an unforeseen tragedy leaves you severely injured, your ability to earn a paycheck will likely be nonexistent. Without significant emergency cash reserves to pay the bills, you and your family might wind up with even greater problems because of the mounting unpaid obligations. Similarly, if you die, your family will need potentially significant financial resources to continue paying bills, saving for college and maintaining their lifestyle. Appropriate life insurance benefits are necessary to provide your family with the funds they will need to replace your income.

Peace of Mind


When others rely on your earnings to live and maintain a lifestyle, properly structuring a financial plan to protect those people from unexpected events that could threaten their economic conditions is the mature and responsible course of action. Purchasing life and disability insurance policies is an integral aspect to proper financial and estate planning. Additionally, the significant economic security gained from the benefits of life and disability insurance programs provides peace of mind for everyone involved.

References


Wall Street Journal: The Skinny on Buying Disability Insurance
Get Rich Slowly: The Disability Insurance Maze -- How to Select and Purchase a Policy
Nationwide: Why Do I Need Life Insurance?

Resources (Further Reading)


Cash Money Life: When Do You Need Life Insurance?
CBS Money Watch: How to Buy Life Insurance Wisely




This article is a Twisted Nonsense Exclusive! (04/13/2011)