Disability insurance pays benefits when you can't work because you're sick or injured. Most disability policies pay a percentage of what you earn when you're able to work. If you love your paycheck, disability insurance is a good way to protect the income you couldn't live without.
Why You Need Disability Insurance
Did you know that your chances of being disabled for longer than three months are greater than your chances of dying prematurely?
It's true. This is largely because modern medicine has made many previously fatal illnesses treatable. However, accidents can happen anywhere, at any time - and the same is true for illness. It means you really have to be careful out there...and protect your income with disability insurance!
Think about what might happen if you were sick or hurt and couldn't work for days, months, or even years. How would you support yourself? If you have a family, how would you support them? A spouse's paycheck might help, but for many, it simply wouldn't be enough to handle all the bills.
Could your spouse's income support your whole family?
What You Need to Know about Disability Insurance
Here's a little background information on how disability insurance works.
Every policy has a waiting period that must pass before you can receive any benefits. This waiting period is called the "elimination period." Shorter elimination periods will cost more money, while longer elimination periods reduce the price of your policy.
If you buy a policy, elimination periods range from 30 to 365 days, although 90 days is the most common. If you're using group disability insurance (available through your employer, for example), you'll probably have a waiting period of no more than 8 days for short-term policies that pay benefits for up to six months, and 90 days for long-term policies that pay benefits up to age 65.
If your workplace doesn't offer enough (or any) disability coverage, you can buy a policy for yourself. These are called "private" policies, as opposed to government insurance (provided through state or federal government). Private policies usually offer more comprehensive benefits than government insurance. Most people buy policies that pay benefits up until age 65; however, two- and five-year benefit periods are also available. Because many injuries or illnesses don't totally disable you, some policies offer a rider (policy addition) that pays you a partial benefit if you can work part time and earn some income.
Tips for Buying Disability Insurance
There are many types of private disability insurance. If you're interested in a policy, it's a good idea to talk to an agent to find out which type is right for you. For example, would it be more affordable to buy a disability policy or to buy a life insurance policy with a disability rider? I can help you make an educated decision based on your financial needs.