When assessing your need for disability insurance, evaluate how long you can survive without income, in the event you are unable to work.
The basic concept behind insurance is protecting something that has great value– such as cars, homes, artwork and, of course, our lives.
Imagine that you, or a breadwinner, are seriously injured and unable to work for an extended period of time. How will your family manage while you recover? Disability insurance replaces part of your income if you become ill or get injured and can’t work. Anyone who works should have disability insurance.
“I believe that the need for disability income insurance applies to every income earner, even people with no dependents,” said Steven Weisbart, PhD., and Chief Economist with the Insurance Information Institute. “This is because when one is disabled many expenses continue and have to be paid somehow.”
Some employers purchase short-term and/or long-term group disability insurance so they can offer coverage to their employees. While anyone can apply for disability insurance as an individual, there are advantages to having employer-sponsored coverage. For example, when a person is covered through her employer’s group plan, she does not have to prove insurability. The only requirement for eligibility in a group plan is employment by the sponsoring company.
This coverage typically pays approximately two-thirds of a worker’s pre-disability income and compensation only occurs in cases where illness or injury is work-related. The majority of long-term disability cases are not job-related.
Qualifying for disability through the Social Security Administration is not assured, and benefits, which are determined by a worker’s salary and work history, are not that generous. So, to better protect your career, future earnings potential, and your family, disability insurance is a logical choice.