The main purpose of a disability insurance is to ensure that you have a source of income even after you get disabled.
However, there are several instances or situations when you can comfortably let go of your insurance cover.
If you have adequate savings
In case you are the breadwinner but have enough savings as well as other investments such as bonds and dividends, then you can comfortably drop your disability insurance policy.
The best way to determine this is by asking yourself if you will be able to comfortably pay your monthly bills, hospital bills and other expenses related to your recovery.
You should also find out if you will be in a position to pay for your car insurance as well as continue repaying your mortgage loan for an extended period of time. If the answer is yes, then you can proceed to discontinue the disability insurance cover.
If you are not a breadwinner
This is another reason for you to drop a disability insurance plan. This implies that there is someone within your family such as your spouse or child who is able to comfortably provide for the entire family over a long period of time. In such a case you can drop your disability insurance – since it won’t be a must for you to cater to the family’s needs.
When you attain retirement age
Most disability insurance policies cease to operate after the retirement age. It is also a time when you will be allowed to start withdrawing your retirement benefits.
Since the retirement benefits are considered a source of income, most people no longer see the need for disability insurance cover past the retirement age. Besides that, social security disability benefits are automatically converted into retirement benefits once you attain the retirement age.
If you think that your social security disability benefits are enough
This is also one of the reasons as to why you can terminate your disability insurance. The current maximum income one is supposed to receive while earning social security disability benefits is $1,000. If you have already reached that limit, then there is no need for a private disability insurance cover.
However, your monthly expenses are high, then it won’t be advisable to discontinue your disability insurance. The important thing is to ensure that you and your family are financially secure in case of any eventualities.
If you have already paid-off your home and other high-voltage properties
There will be no need for a disability insurance plan in case you already paid off your mortgage and car loan, or bought a home and car through any other means. This means you won’t have a financial dependency to cover these large expenses.
In a nutshell, disability insurance is very important for everyone – it offers financial security in case you get disabled unexpectedly.
However, there are several instances when you can comfortable drop the disability insurance coverage. If you are still insurance, you can ask your policy holder or a finical adviser for guidance.