Because no one can predict an injury or illness that leads to a disability, disability cover is a crucial type of insurance policy that everyone should have. And if you have found yourself in the unfortunate position you need to claim your policy, you will be offered a lump sum disability insurance payout in most cases. However, to ensure you receive the most compensation you can, you should rely on a disability lawyer to handle your claim for you.
Once you have received your payout, your next concern will be managing your money wisely to ensure you are financially comfortable for as long as possible; budgeting is essential when you can no longer earn an income. With that in mind, here are a few money-savvy budgeting tips to help you manage your payout settlement like a pro:
Determine Your New Living Costs
Because the specifics of living with a disability will change quite a bit, you may no longer be able to rely on your old budget. You will have some extra costs, such as the potential need for live-in care. At the same time, you might be able to cross out other costs, such as your vehicle finance, auto insurance, and others. Creating a new budget that specifies all your new living costs is essential.
Invest A Portion Of Your Payout
Stretching any kind of insurance payout can be done with investing. However, the key is to opt for low-risk investments that pay out no less than what you put in. You could consider a high-yield savings account as the safest option, although there are other low-risk investment opportunities to consider as well. If you aren’t too sure which opportunities are best, it is wise to consult an investment expert, and your bank will have such a professional at your disposal in most cases.
Cut Out Debt And Your Use Of Credit
Credit is exceptionally dangerous, especially if you won’t earn an income for an indefinite period. Instead of holding onto any available credit, you should pay off your debts with your payout settlement and close all your accounts, even those that promise alluring rewards that seem like benefits.
Assess Government Disability Benefit Options
Even though you have received a lump sum payout that will keep you financially comfortable for some time, you should also evaluate other avenues of maintaining any form of income flowing. You may be eligible for government disability benefits regardless of your insurance payout, as you were probably paying your taxes while you were earning an income. Your benefits can be used to supplement your monthly living costs, allowing you to save more of your payout. Once again, it is best to discuss your government disability benefits options with your disability lawyer to ensure you know your rights and what you can and can’t claim from the government. Relying on a disability lawyer also means your disability benefits claim will not likely be rejected, as they often are for a variety of reasons.
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