Insurance Case Study: Single and Working - United Benefits

Just Starting Out

Maria is a 25-year-old administrative worker who is earning $70,000/year gross and has about $30,000/year in fixed expenses. These include car payments, rent, and student loans. She spends the rest of her earnings on living and entertainment expenses. Maria doesn’t have a lot of savings.

What happens if Maria doesn’t have insurance?

Maria has had a car accident and must be hospitalized for one month. She injured her arm and shoulder. After she’s discharged from the hospital, Maria will need to undergo a rehabilitation process for 12 months to regain the use of her arm. She has health insurance, but there are still medical bills to be paid. Maria, unfortunately, doesn’t have income for 13 months but still must pay her fixed bills. She receives some disability payments from the government, but they don’t cover all her expenses. Maria moves back home and borrows money from her parents while she recovers.

What insurance could Maria have taken out to protect herself?

Protecting Your Paycheck

Maria could have purchased short-term disability insurance that would have helped her protect her paycheck in the event of a covered accident, illness, or diagnosis. Since Maria didn’t have a lot of savings or sick leave to fall back on, short-term disability coverage would have helped her make up for the loss of income from her car accident.

Maria also could have taken out other supplemental insurance policies that would have paid her cash benefits. Accident insurance covers medical expenses and out-of-pocket costs that result from an accidental injury. Hospital indemnity insurance pays a fixed sum per time period while the policyholder is staying in the hospital. This would have been useful due to the prolonged time frame of Maria’s hospital stay.

Protecting Your Life

Since Maria is only 25, a life insurance policy is quite affordable. A whole life insurance policy can also offer a benefit in the event of a permanent disability. In addition, whole life policies build cash value that works well for wealth building and retirement planning, and it could pay dividends directly to Maria if she decided to go with a mutual company. The policy premium is locked in for the duration and will never change for as long as Maria keeps the policy.

What if Maria had insurance?

After Maria’s car accident, she completed the waiting period necessary before she could receive payments from her insurance policies. After using her accumulated leave, she may have had to draw on her savings or ask her family for support for the first couple of weeks she was out of work. After the waiting period was over, Maria began receiving tax-free cash benefits that she could use as she saw fit. She was able to keep her bills paid and stay in her own apartment.

Are You Single & Working?

Your situation may be like Maria’s, or it may be wildly different. Either way, United Benefits Specialists can help you find the best coverage solutions for your specific needs. Get in touch for a free one-on-one consultation.

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