As a truck driver, you understand the importance of getting your shipments and load on time. Your customers are relying on you to be on time, unload your shipment, and ensure the shipment is in good order. Then, you are on your way to your next destination. Rain, sleet, or snow – the weather doesn’t matter; people are relying on you to get the job done. What if you could no longer do that job? Have you ever thought what would happen if you became sick, ill, injured, and disabled? In this article, we discuss why truck drivers need disability insurance.
More Important People Rely On You
Your customers are very important. There is also a group of people who are more important. Who can be more important than my customers, you think. They pay the bills. True. They do, but they don’t love you as your family loves you. By far, if you have a family, your spouse and children rely on you more than you think. They love you more than anything.
There are tough questions that need answers. Would you and your family be able to continue your standard of living without your income? If not, what changes would need to be made? Would your spouse have to work? Would you need to sell your home to make ends meet? Who could be flexible with the children should you be disabled? The tough questions can go on and on.
Disability is known as the destroyer of dreams. Your future and family dreams could be destroyed. They don’t have to, though. With disability insurance, you have peace of mind knowing that you have a plan – and income – in place should the unexpected happen.
Yes, But It Won’t Happen To Me
You think it won’t. The probability of having a long-term disability is anywhere between 1 in 3 and 1 in 4 workers. Contrast this to unexpected death, say from a motor vehicle accident, which is 1 in 114. Even dying from cancer has better odds: 1 in 7
But, John, I’m not going to get hurt, or in a wheelchair, you say. Wow! I respond. If you know that, then you should not be a truck driver. You need to play the lottery or have your own Atlantic City or Vegas show!
In all seriousness, when we think of disability, we think of someone bound in a wheelchair, right? Not true and far from it. According to the Council For Disability Awareness, 90% of disabilities are from illnesses (like cancer) than from accidents.
Ok, John, but I have workers compensation. So, I am covered. That’s great, I respond. Did you know that 5% of disabling conditions are work related, leaving the other 95% not covered by workers compensation? That makes sense, since 90% of disabilities are from illnesses. What will you do if you can’t work?
Now You Know Why Truck Drivers Need Disability Insurance
Hopefully, you know now that truck drivers need disability insurance. Already have some through work? While that is good, most likely it is not enough. Why? Most likely your group insurance is paid pre-tax out of your salary. While that seems good, as it lowers your income for income tax purposes, it is not good if you need to take a benefit. The benefit ends up being taxable income. What does this mean? By every April 15th each year, you need to report your disability benefit and pay taxes on it, which can put additional strain on your finances. This makes, in effect, your net-disability pay being about 30-40% of your gross salary. Can you and your family live off that?
The good news is that incrementally, you may not need much more. How much you need depends on your income. Most importantly, you will have peace of mind. In the case of your disability, you will receive a benefit that helps maintain your standard of living, cover costs such as your mortgage, utilities, and groceries, and keep your family dreams and future alive.
Disability Insurance Policy Basics
While every carrier is different, here are important policy basics for truck drivers.
You can cover up to 70% of your gross salary. Every carrier is different. Some have 60% coverage maximums. For example, if you have a gross monthly salary of $5,000, you can cover up to $3,500 (70%).
Obviously, your health matters for underwriting. What you may not know is that your occupation matters, too. Most carriers will not cover high-risk professions for the simple reason of an increased probability of disability. Carriers categorize the risk from a scale of 1 to 5 or B to 5A. The lower the number or letter, the riskier the occupation, and the higher the premium, all things being equal. Truck drivers are typically categorized as a 2 or A. We only work with carriers that include an occupation upgrade if other favorable conditions are met, such as good health underwriting.
There is an elimination period, which is like a deductible. It is the length of time that elapses before disability benefits begin. For example, if you select a 90 day elimination period and are disabled, benefits will begin after 90 days. This means you need to have adequate savings to carry you and your family until benefits begin.
Benefits can be paid for as long as 5 years.
Coverage if you are disabled from your own occupation for a specified period of time (generally two years, but may be shorter) and then disabled from any occupation.
Benefits are income tax-free. Note that benefits from group disability insurance plans are typically taxable.
Various additional benefits available including, but not limited to partial disability, recurrent disability, and a survivor benefit if you were to die from your disability within a specified timeframe.
Optional Disability Insurance Riders
You can add optional riders at an additional cost to your policy to best fit your needs and budget. Some popular rider options for truck drivers include:
Return of Premium Rider: Provides disability insurance coverage if you need it, your money back if you don’t.
Guaranteed Insurability Option Rider: Allows you to obtain the coverage you need now with the option to purchase additional coverage in the future without evidence of good health. You generally can purchase additional coverage every 2 years up to age 55. (You do not need to wait 2 years if you had a life change, defined as a marriage, death of a spouse, divorce or birth or adoption of a child; Instead within 3 months of a life change, you may purchase additional coverage.) No more than 5 purchase options can be made.
Retroactive Injury Benefit Rider: Pays benefits from the date of disability due to injury if disability occurs within 30 days of the injury and continues through the elimination period.
Activities of Daily Living Rider: Pays an additional benefit if you cannot perform two or more of the activities of daily living or if you are cognitively impaired.
Protect Your Business If You Are A Business Owner
If you own your own trucking business or are self-employed, you have the advantage of a policy that will pay your business expenses upon a disability. The policy is called a business overhead expense policy. Premiums are tax deductible. If structured properly, benefits are tax free as well. This type of policy will ensure your business remains solvent during your inability to work from a disability. This is an additional reason why truck drivers need disability insurance. Contrast this policy to a traditional disability insurance which pays a percentage of your income.
Carriers who offer this type of insurance typically offers a discount on a disability insurance policy. Additionally, we only work with carriers that offer an occupation upgrade as well.
We hope now you have a solid idea why truck drivers need disability insurance. Confused? Don’t feel that way. We’re here to help educate you and protect your income and future. Don’t know where to start? Use this disability insurance needs analysis worksheet. Follow the instructions; it is rather easy to fill out (we at My Family Life Insurance try to make understanding insurance easy). Next, feel free to reach out to us for our assistance or a quote. Or, us the form below. We only work for you, your family, and your best interests only. We have helped many truck drivers and families secure disability insurance to give them peace of mind.