If your earnings are decreased due to illness or injury, disability insurance can help. These disability insurance tactics will help you want to save money while still getting the security you need.
1. Extend The Elimination Time.
The elimination period is when the insurance provider will begin paying you benefits; the longer it is, the lower your premium will be. This means you’ll need enough savings to support yourself and your family for a set period if you don’t have any income. 90 days and 180 days are the most frequent elimination intervals, but they can be extended if required.
Consider a more extended elimination period if you have a sufficient emergency reserve, additional sources of income such as a working spouse, or your costs are low. You might also want to avoid purchasing short-term disability insurance, ordinarily available through group coverage.
2. Cut The Benefit Period In Half.
If you’re starting out in emergency medicine, you should go for coverage that provides benefits until you reach retirement age, usually 65. You can cut your premium by reducing the benefit term, which is the length of months or years that the disability insurance pays you if you’ve done an excellent job of saving, generating wealth, and reducing debt over your career. In that situation, a five-year benefit duration might be appropriate. Premiums could be reduced by 20-30%.
3. Reduce Your Insurance Coverage.
When you undergo the underwriting procedure to buy disability insurance, the insurance company will typically give you a quote for the highest amount of disability insurance coverage you are eligible for. They will not be able to replace all of your pre-disability earnings. Instead, it’s usually limited to 60% to 70% of your pre-disability salary. But what if your monthly costs are significantly lower than the disability insurance benefit number you were quoted? Instead of taking the highest amount offered, you might choose to reduce your disability insurance benefits. This is dangerous because your expenses may rise due to your disability. In this circumstance, you’ll need a sizable investment portfolio or another source to bridge the gap.
4. Eliminate Riders.
Catastrophic disability coverage, own occupation coverage, cost-of-living adjustments, residual disability coverage, and other riders can be added to the standard disability insurance policy. Several of these riders, such as own occupation coverage, which pays disability benefits even if someone works in another occupation, are, in my opinion, pretty valuable. However, if your goal is to save money on your premium so that you’re more likely to have some disability insurance coverage rather than none, skipping the riders might save you a lot of money.
5. Buy Disability Insurance For A Group.
Disability insurance for individuals is typically more expensive than group insurance. If you work for a hospital system or another EM organization, check your employer’s benefits guide to see if they offer group disability insurance. The premiums for basic long-term disability insurance coverage are sometimes paid for you by your employer. You may, however, be able to acquire additional for a little deduction from your salary.
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Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.
Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.
Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.
Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.
Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.
With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.
Aaron can help you and your family to create, preserve and protect your legacy.
That’s making a difference.
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.