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By Tammy Gravis

5 questions answered about disability insurance

Taking total control of your financial health is in your hands. It's your responsibility to be capable of paying your bills and making the right choices in life. You will also want to take the proper steps in assuring that you have the right amount of insurance in place in the event you become unable to work. This will require you to get disability insurance to give you the peace of mind you need if this happens. By knowing specific things about this type of coverage, you will be better prepared for what you need to do in order to protect yourself.

What is disability insurance?

This insurance is designed to pay you a certain amount of money monthly or annually when you purchase it. This is typically 60 to 65 percent of your salary, and you can generally expect to wait 90 days before receiving any payment once you file a claim.

How to qualify as being disabled?

In order to receive compensation from your disability coverage, you will need to prove that you're indeed not capable of working. This will typically demand that your medical records be submitted by your physician.

Your doctor should agree that you're unable to work and list the reasons for your disability. You will need to have this in writing and submitted to your insurance company in order to get compensation.

What is the cost of disability?

One common question that many people want to have answered is the cost to obtain disability insurance. There are several factors that will dictate how much an individual has to pay for this coverage.

However, the average cost of disability insurance is only one to three percent of the annual income of the individual seeking this coverage.

Can you get a temporary disability plan?

It is possible to obtain a temporary disability insurance policy that will enable you to be compensated if you're unable to work for a short amount of time. This is ideal to have in place in the event you suffer a health problem or an injury that requires you to miss work for only a short while.

Do you pay taxes on disability payments?

The good news for you if you receive money for being disabled from your insurance company is that you won't have to pay income taxes on this amount. This is because your premiums were taxable and this will exempt you from having to make additional tax payments.

However, you will want to keep in mind that you can't deduct disability insurance premiums from your taxes. Be sure to speak to your tax accountant about this to ensure you do the right thing when filing taxes.

The challenges of dealing with either a short-term or long-term disability are many. It's ideal to have some coverage in place that will replace a huge portion of your income if this happens to you. Take the time to speak to a disability insurance agent to learn the full details of this coverage type for your financial protection today.

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