You may think that disability insurance is something you don’t need, especially if you’re young, healthy, and work in a low-risk occupation. But the truth is, disability insurance is one of the most important types of insurance you can have, because it protects your most valuable asset: your ability to earn an income.
That means you have a 25% chance of losing your income for at least three months at some point in your career. And that’s not even considering the possibility of a long-term or permanent disability that could prevent you from working for years or even for life.
What would you do if you couldn’t work for an extended period of time due to an illness or injury? How would you pay your bills, support your family, and maintain your lifestyle?
Without disability insurance, you could face serious financial hardship and even bankruptcy.
Disability insurance can help you avoid these consequences by providing you with a monthly benefit that replaces a portion of your lost income.
Types of disability insurance
There are two main types of disability insurance:
Both types replace a percentage of your monthly base salary, usually up to a cap, such as $10,000. The amount of coverage you need depends on your income, expenses, and savings.
Short-term disability insurance pays benefits for a few months, typically up to one year, after a waiting period of a few days or weeks. This type of insurance can help you cover your immediate expenses while you recover from a temporary disability, such as a broken leg, surgery, or pregnancy.
Long-term disability insurance pays benefits for a longer period, usually until you recover from your disability, reach a certain age, or retire. This type of insurance can help you cover your ongoing expenses and protect your future financial security if you suffer from a chronic or permanent disability, such as cancer, a stroke, or a spinal cord injury.
READ MORE:What does long-term mean in disability?
How to get disability insurance
There are several ways to get disability insurance, depending on your situation. Here are some of the most common options:
- Employer-sponsored disability insurance: Many employers offer disability insurance as part of their employee benefits package. This is usually the cheapest and easiest way to get coverage, as you don’t have to pay the premiums or undergo medical underwriting. However, employer-sponsored disability insurance may not provide enough coverage for your needs, and you may lose it if you change or lose your job.
- Individual disability insurance: You can buy your own disability insurance policy from an insurance company or an agent. This gives you more control over the amount and type of coverage you get, and you can keep it regardless of your employment status. However, individual disability insurance can be more expensive and harder to qualify for, as you have to pay the premiums and pass a medical exam.
- Professional association disability insurance: If you belong to a professional association, such as a trade union, a medical society, or a bar association, you may be able to get disability insurance through them. This can be a good option if you want to supplement your employer-sponsored or individual disability insurance, as you may get a group discount and more favorable terms. However, professional association disability insurance may have some limitations, such as lower benefits, longer waiting periods, or stricter definitions of disability.
- Government disability insurance: You may be eligible for disability benefits from the government, such as Social Security Disability Insurance (SSDI) or Workers’ Compensation. These programs can provide some financial assistance if you become disabled, but they have strict eligibility criteria, long processing times, and low benefit amounts. Therefore, you should not rely on them as your sole source of income protection.
Why disability insurance matters
“Disability insurance is not a luxury, but a necessity”
It can make the difference between staying afloat and sinking into debt, between preserving your dignity and losing your independence, between securing your future and jeopardizing your dreams. Disability insurance can save your life and livelihood in the event of a devastating illness or injury.
Don’t wait until it’s too late to get disability insurance. The best time to get it is when you’re young and healthy, as you’ll have more options and lower rates.
The cost of disability insurance is a small price to pay for the peace of mind and financial stability it can provide.
If you need help finding the right disability insurance policy for your needs, you can use the search tool below to compare quotes from different providers. Just enter your information and get instant results.
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