Protect Your Employment Income

Disability Insurance

What happens if you become sick or disabled and can’t work?

What is your most valuable asset? Many would mention a business while others a home. Some might present an investment portfolio. However, the majority of individuals fail to remember the single most valuable asset that makes all others possible: the ability to earn an income. Our earning potential protects our financial independence, keeps our families safe, and ensures our future. But what happens when you can’t work due to a disabling illness or injury? How will you pay your rent or mortgage if you become disabled? Who will pay for your other necessities if illness prevents you from keeping your job? Why risk becoming dependent on charity or government?

While health insurance covers you should you need medical care by paying for necessary medical treatment, it does not provide any income.  Also remember: worker’s compensation only pays if you are hurt while on the job.

CEG Life Insurance Services offers disability insurance, from multiple insurance companies, which will provide you and your family a regular monthly paycheck should you suffer a disability and can’t earn an income.

If you haven’t protected your income from the 1 in 4 chance that you will become disabled during your working years, contact us today.

Disability Insurance Overview

Disability insurance offers a set monthly benefit, for a set amount of time (benefit period), after a set number of days have passed following a disability claim (waiting period). The maximum monthly benefit is based on your total earned income through your occupation, and is typically between 50% – 60% of that amount (although you can choose a benefit amount lower than the maximum). Also, in addition to age, health, and gender, disability insurance prices are based on your actual occupation and work duties as well.

Here are the typical options for benefit periods (ranging from short to long term):

  • 1-year, 2 years, 5 years, 10 years, Age 65, Age 67, Age 70 (the longer the benefit period the higher the cost of the policy)

Here are the typical options for waiting periods:

  • 30 days, 60 days, 90 days, 180 days, 365 days (the shorter the waiting period the higher the cost of the policy)

In addition to these features, there are also several optional benefits that you can add (at an extra cost) to a policy to increase the overall financial protection it will provide for you.

Optional benefits of a disability insurance policy may include:

Non-Cancelable Disability Insurance

  • With this feature, the insurance company cannot cancel the policy nor increase your premiums while your coverage remains active. In other words, your rates stay the same year after year…as do your benefits. Alternatively, some companies offer “Guaranteed Renewable” coverage, which means they can’t cancel your coverage but they could increase your premium based upon approval from the state commissioners’ office.

Cost of Living Adjustment (COLA)

  • If you become disabled, your benefit will increase by a certain percentage (3% is a typical amount) each year to keep up with inflation.

Regular (“Pure Own”) Occupation Benefit

  • If you become disabled and are no longer able to work in your specific occupation, but you can work in a different occupation, you can collect your full disability benefit while still receiving compensation from your new employment. This provides the most comprehensive definition of disability.

Business Overhead Expense Disability Insurance

  • Designed for business owners, this feature pays for all expenses related to your business (including employee salaries) should you become disabled. This feature can include additional coverage for items such as professional membership dues, postage and other business expenses. The coverage period is generally two years or less.

Catastrophic Disability Benefit

  • An additional monthly benefit amount that is added to the standard benefit amount, if you are disabled to the extent that not only can you no longer work in your profession, but you cannot perform two of the activities of daily living (bathing, eating, transferring, continence, toileting, cognitive impairment).

Future Increase Option

  • The option to increase your monthly benefit amount in the future, based on an increase of your income, without having to medically qualify again.

Residual Disability and Recovery Benefit

  • If you are partially disabled and can only work part time in your occupation (whether in hours, responsibilities, or both), and/or have a reduction in earnings, you can collect a partial disability benefit payment that is proportionate to your loss of earnings for up to the duration of your benefit period after you return to work. There is usually a basic and an enhanced version of this benefit, with the basic version capping a monthly benefit payout at only a portion of your regular benefit, while the enhanced version would allow up to your full monthly benefit to be paid out. Other distinctions may apply as well.

Student Loan Protection Benefit

  • The benefit reimburses you for any payments you make towards student loan debt.

Unlimited Mental Disorder/Substance Abuse

  • Benefit payments will payout for the full benefit period (instead of just 24 months, which is typical) in case of a disability resulting from a mental disorder or substance abuse.

Return of Premium Benefit

  • If you never need to collect a benefit payment, you can get a full return of all premiums paid at age 65 or age 67.

Guarantee of Physical Insurability Benefit

  • This feature insures that you will be able to purchase larger amounts of insurance in the future as your need for coverage increases, typically every three to five years from the initial date of the original policy.

Social Insurance Substitute

  • If you qualify for social security disability insurance (SSDI), workers’ compensation, or some other social benefit, your monthly benefit payments from your individual policy will be reduced. However, if you don’t qualify for SSDI or other social benefits, there’s no change in your monthly benefit payments from your individual policy. This benefit lowers the overall cost of your individual policy.

Note: This is a synopsis of some the most popular features available with disability insurance. Not all companies offer all of these benefits. Also, specific companies may have other names for the various benefits here listed and described. For more information, or answers to any questions related to disability insurance, please contact us.

Will you be part of the 25%?

Don’t risk your financial security

Based on past history, the Social Security Administration estimates that 25% of current 20 year olds will suffer some manner of disability that will render them unable to work before reaching the age of 67.  In most situations, a short-term disability that disrupts the household income would create a financial hardship.  A long-term disability can be financially devastating without a solid plan in place that would replace those lost wages.

Disability Insurance gives you tax-free income in the form of a regular monthly paycheck to help you maintain your current lifestyle and continue providing for yourself and your family no matter how long you are out of work.  This money can be used as you see fit for expenses such as:

  • Mortgage or rent payments
  • Auto payments
  • Medical bills
  • Utilities
  • Groceries
  • Any other needs or wants


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