1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair
Isaac).
2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% -
30%!
3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.
Reasons for
considering Disability Insurance
Do you know how you would manage to survive if you suddenly
could not work tomorrow? Would you have enough money saved up to
live in the same house or apartment you’re currently living in?
Could you still make car payments, send your children to the
same private school
they’re
attending or even cover basic expenses like food and clothing?
These are all questions that millions of Americans ask
themselves each and every day. The truth is that many of them
worry about what would happen if they were injured on the job or
took ill and simply could not work for an extended period of
time. The truth is that no one is built to overcome such
adversity. However, there is a way to make sure that you are
your family are covered, should the worst-case scenario arise.
Disability insurance is one option.
Disability
insurance allows you to prepare yourself just in case you should
fall sick or get injured and be able to work. It essentially
allows you to insure yourself against such an instance and helps
you to provide a steady income should the need ever arise. Like
car insurance or flood insurance for your home, you can purchase
an insurance plan for any disabilities that may affect your life
at one time or another. That said, there are many varying
opinions about disability insurance. Continue reading to find
out why you may or may not wish to opt to purchase disability
insurance.
The Basics of Disability Insurance
Video: Disability Insurance Basics
Still confused on exactly what disability insurance is or simply
want to learn more about the different types of it? Watch this
video to get the basics and learn the important terms
surrounding disability insurance.
Clark Howard Advice:
When it comes to different types of insurance, most Americans
are much more likely to purchase life insurance than disability
insurance. Unlike disability insurance, life insurance provides
money for your family should you pass away during your key
working years. This is very helpful to families who suddenly
lose their provider due to death. However, the truth is that you
are about three times more likely to get injured or to get sick
and be unable to work than you are to die during the years of
your life during which you are working. Because of this, Clark
Howard, who hosts the popular talk radio show The
Clark Howard
Show on radio station WSB-AM in Atlanta, Georgia, recommends
that you look into buying disability insurance for yourself. Now, that
is not to say that you shouldn’t also purchase life insurance,
but disability insurance can be extremely helpful for you and
your family if you’re ever hurt or sick and unable to work.
Howard also advises people to be careful when buying disability
insurance. Here are just a few of Howard’s thoughts of
disability insurance:
1. Do not buy disability insurance directly through your
employer.
Due to a federal law called ERISA, the federal
government is not required to help you if you purchase
disability insurance through your employer. Therefore, you may
think you’re protected but should your employer fail to help you
after you are injured or sick, the insurance companies may not
help you either. And guess what? The government cannot do
anything about it.
2. Search around and buy your own disability insurance.
You’ll
be fully protected by law and you can usually insure up to 75
percent of your regular income.
3. Don’t buy any disability insurance plan that uses the
definition of an illness or injury from the Social Security
Administration.
These types of insurance are notoriously
unhelpful.
4. You may not necessarily need disability insurance if you are
wealthy or can afford to sustain your current lifestyle without
an income.
Don’t be fooled into purchasing disability insurance
if you don’t have to.
A Real Life Tale of Disability Insurance
Video: Understanding Disability Insurance
While purchasing disability insurance is important, you also
need to realize that it is a product. It’s designed to help you
but there are also plenty of salesmen ready to give you a pitch
on it. Watch this video and understand more about it but also
understand that this is a big business. So go out and make the
decision that works best for you and your situation.
Dave Ramsey Says:
Some of you may still be confused about what exactly disability
insurance covers. Dave Ramsey, a financial writer, TV
personality and the host of The
Dave Ramsey Show on more than 350 radio stations in America,
understands that and often speaks with people with questions
just like yours. However, unlike Clark Howard, he has a slightly
different view of disability insurance and how you should
approach it. First, you should understand the difference between
long-term disability insurance and short-term disability
insurance. Long-term insurance means that you will receive any
lost income for a long period of time, usually for life or at
least until you are 65 years old. Naturally, this sort of
disability insurance is more costly for you. On the other hand,
short-term disability insurance covers you for just around three
years. But regardless of which option you choose, Ramsey warns
listeners and readers that disability insurance does not usually
kick in for a few months after you are injured or fall ill. This
is a crucial time for people and can often make or break them
physically, emotionally and financially. Therefore, Ramsey warns
people to save and always have an emergency fund handy,
regardless of whether you buy disability insurance or not.
However, like Clark Howard, Ramsey is quick to point out that
too few Americans know about or take disability insurance
seriously and that while many of them own life insurance,
statistics have proven that most people are more likely to
become disabled than to die between the ages of 30 and 60. So
while his opinion on disability differs slightly, he provides a
similar argument for strongly considering disability insurance.
Where To Find Out If Disability Insurance Is Your Best Option
Hopefully, you have a better understand of disability insurance
by now. But only you can decide whether or not disability
insurance is worth the risk for you. It’s important to speak
with someone today who can help you assess the risk and find out
whether or not you should purchase disability insurance. Here
are some phone numbers of different companies who can help you
to understand disability insurance better.
Or check out this
list of health insurance providers to find a
disability insurance company that suits you best.
Aetna
(860) 273-0123
America’s Health Insurance Plans
(202) 778-3200
CIGNA
(800) 828-3485
Department of Veteran Affairs
(800) 827-1000
Guardian Disability Life Insurance
(888) 513-2300
Life and Health Foundation For Education
(888) LIFE-777
Do you know how you would manage to survive if you suddenly
could not work tomorrow? Would you have enough money saved up to
live in the same house or apartment you’re currently living in?
Could you still make car payments, send your children to the
same private school
they’re
attending or even cover basic expenses like food and clothing?
These are all questions that millions of Americans ask
themselves each and every day. The truth is that many of them
worry about what would happen if they were injured on the job or
took ill and simply could not work for an extended period of
time. The truth is that no one is built to overcome such
adversity. However, there is a way to make sure that you are
your family are covered, should the worst-case scenario arise.
