Go beyond employer's life and disability policies - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Go beyond employer's life and disability policies

Print
Font Size:
Default font size
Larger font size

Joseph Ortiz

Related Stories

Posted: Saturday, January 28, 2012 8:00 am

If you work for an employer who offers a benefits package that includes life insurance and disability income insurance, consider yourself fortunate. But you can't necessarily consider yourself fully protected. And if you don't have appropriate life and disability insurance, your long-term financial goals could be at risk.

Life Insurance: How much is enough?

The amount of life insurance you'll require will change throughout your life. When you're starting out in your career, and you're single and living in an apartment, you probably need a lot less insurance than you might a few years later, when you have a spouse, children and a mortgage.

Because your life insurance needs will evolve over time, you can't really use a "formula" to determine how much insurance you should own. The only way to determine your true needs is to take stock of your individual situation.

How big is your mortgage? How much will it cost to send your kids to college? How much income is your spouse likely to bring in over time?

By answering these and other key questions, you should be able to get a good sense of how much life insurance you'd need at any point in time. From there, it's just a matter of seeing how much insurance your employer is offering and then purchasing enough coverage on your own to make up the shortfall, if one exists. And you'll find other benefits to owning your own policy: It may be more cost effective, and you'll keep the coverage even if you change jobs.

If you purchase a term life policy, you'll find it quite affordable to receive a substantial amount of coverage. Eventually, to help yourself meet goals beyond just protection, you might want to consider some type of permanent insurance, such as whole life or universal life, which contains an investment component in addition to the death benefit.

Disability Insurance: Go long

An illness or accident will keep one in five workers out of work for at least a year during their working careers, according to the U.S. Census Bureau.

And Social Security Disability Insurance (SSDI) might not help, because, in any given year, most claims are denied. In fact, in 2007 only about 38 percent of the 2.2 million people who applied for SSDI benefits actually received them, according to the Social Security Administration.

So, while you are healthy and working, ask some questions about your employer's disability insurance plan. What does it cover and for how long? Many employers provide short-term disability plans because they are relatively inexpensive, but as we've seen, many disabilities last a year or longer.

Find out if your employer offers any long-term disability coverage, which can provide benefits until you reach age 65. If so, think about purchasing as much as you can.

If you can't get enough coverage at work, consider a policy from an outside provider. Basically, you need enough of a monthly disability insurance benefit to replace your net take-home pay, so that your current lifestyle does not change. Disability insurance policies vary widely in coverage and premium, so shop around before purchasing one.

Take full advantage of your employer's life and disability insurance plans. But if this coverage isn't enough, get what you need on your own. You'll be making a smart investment.

• This article was written by Edward Jones for use by Ahwatukee Foothills Edward Jones Financial Advisor Joseph B. Ortiz, CRPS. Reach Ortiz at (480) 753-7664 or joseph.ortiz@edwardjones.com. Chartered Retirement Plans Specialist and CRPS are registered service marks of the College for Financial Planning.

More about

More about

More about

  • Discuss

Conservatives whine after Pentagon finally lifts ban on transgender troops

Topics: Ash Carter, DADT, military ban on trans service members, The Pentagon, Transgender, Video, Video News, Media News, News, Politics News…

Published: June 30, 2016 - 5:16 pm @ http://www.salon.com/2016/06/30/conservatives_whin…

Thanks Obama: Sources say gun used in Paris terrorist attack came from Phoenix

On Wednesday, Judicial Watch reported that one of the weapons used in the November 2015 terrorist attack in Paris came from Phoenix, Arizona, …

Published: June 30, 2016 - 5:17 pm @ http://conservativefiringline.com/thanks-obama-sou…

Arizona Businesses Celebrate Independents Week

Published: Wednesday, June 29, 2016 - 7:40amUpdated: Wednesday, June 29, 2016 - 4:46pm downloadBusinesses in Phoenix and around Arizona are ce…

Published: June 30, 2016 - 5:17 pm @ http://kjzz.org/content/327347/arizona-businesses-…

Lockwood named Arizona Science Center board chairman

According to the U.S. Department of Commerce, women hold fewer than 25 percent of STEM jobs. As the new chairman of the board for Arizona Scie…

Published: June 30, 2016 - 4:59 pm @ http://www.scottsdaleindependent.com/news/lockwood…

Police catch Gilbert man responsible for 45 video game thefts from East Valley Target stores

GILBERT, AZ - Police have linked a Gilbert man to dozens of video game thefts from Target stores around the East Valley. Court records show th…

Published: June 30, 2016 - 4:24 pm @ http://www.abc15.com/news/crime/police-catch-gilbe…

Phoenix, Arizona, Aims To Rebuild Downtown, Attract Entrepreneurs & Startups

June 30th, 2016 by Derek Markham  Originally published on Bikocity. The sprawling metropolis of Phoenix, Arizona, the sixth largest city in th…

Published: June 30, 2016 - 3:52 pm @ http://cleantechnica.com/2016/06/30/phoenix-arizon…

Joseph Huff-Hannon: Morning in Machine Gun America

Exploring American gun culture and the thin line between fact and fiction. Image by Flickr user Todd Lapin By Joseph Huff-Hannon I’ve never be…

Published: June 30, 2016 - 3:46 pm @ https://www.guernicamag.com/daily/joseph-huff-hann…

Tucson donor issues challenge to Phoenix: Save Arizona Theatre Company

You might call it a stay of execution, except the clemency call came not from the governor’s mansion but from inside Arizona Theatre Company’s…

Published: June 30, 2016 - 2:59 pm @ http://www.azcentral.com/story/entertainment/arts/…

Baby Boxes Save Lives. So Why Are They Running Into Trouble in Indiana?

In middle-ages Rome, the walls of convents had “foundling wheels” where new mothers could leave their unwanted babies. In present-day South Ko…

Published: June 30, 2016 - 2:58 pm @ http://www.slate.com/blogs/xx_factor/2016/06/29/ba…

Scrappy startup? Turn up the heat in Phoenix.

At the Global Entrepreneurship Summit a few days ago, Google co-founder Sergey Brin advised fledgling startups to stay away from Silicon Valle…

Published: June 30, 2016 - 2:58 pm @ https://blog.somaticlabs.io/scrappy-startup-turn-u…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…