When you think about the insurance that you need, disability insurance might not be at the top of your list, but it should be. If you become disabled, it can help you cover expenses and save you from financial hardship.

What would happen if you were hurt at work tomorrow and couldn’t go in for a few months?

What about a car accident or illness that takes a year or two to recover from?

If you are the primary income earner of your household, it could mean financial hardship, particularly if you don’t have disability insurance.

Here’s a look at what disability insurance and why it’s an important protection for your personal finances.

What is disability insurance?

Disability insurance pays you a monthly benefit if you become disabled. Most people are wise to purchase both short-term and long-term disability insurance, as coverage for long-term disability may take six months to kick in. Short-term disability, as the name implies, starts faster than long-term.

Common causes of short-term disability claims are:

 

• – Musculoskeletal disorders – Digestive disorders – Mental health issues – Injuries

Long-term disability claims most commonly stem from musculoskeletal disorders, cancer, pregnancy, mental health issues, and injuries.

Disability is a common cause of bankruptcy. Social Security Disability Insurance (SSDI takes a very long time to receive if at all ) and Workers’ Compensation if hurt on the job only may offer some benefits to someone with a disability, but they may not offer enough income to pay for everything you need. Disability insurance is an important backup plan if you can’t go to work and need to keep up your income while recovering.

Not everyone needs disability insurance. Having a very large nest egg of money may be enough to handle a disability period but you are losing

100 % of that money and depleting assets while with DISABILITY INSURANCE YOU ARE PAYING PENNIES ON THE DOLLAR FOR SECURITY.

However, disability insurance is a necessity for other people – especially those who work manual labor jobs. If you work in an injury-prone profession, you should definitely invest in disability insurance. Contact – Jarad@diversifiedins.com for additional questions and a personalized quote. 800-533-5969.

Disability insurance is like life insurance. If your family doesn’t rely on your income, then you probably don’t need to buy it.

“If you’re the breadwinner, you better have some disability insurance,”

Why is disability insurance so important?

Disability insurance replaces your income if you get seriously ill.

Some of those most common disability insurance claims relate to cancer, musculoskeletal disorders, and depression. While you hopefully never have to deal with any of these unfortunate situations, they are quite common.

Disability insurance replaces income if you are severely injured.

 

Many professions carry a high likelihood of injury. If you do any kind of manual labor, your body is essential in your ability to earn an income. Construction, factory, and other manual jobs could lead to injury at work. While your employer’s insurance should cover some of your bills, it may not be enough.

You could also fall victim to a surprise injury. A slip and fall on an icy sidewalk, a car accident that isn’t your fault, a fall off a ladder and other surprises could put you disabled by the incident. No one get hurt on purpose.

Most disability insurance pays around 60% of your income. So if you normally make $4,000 per month, your disability insurance would pay $2,400 per month. That is a long-shot from what you made before but hopefully is enough to get by when factoring in emergency savings.

The Social Security Administration says that about 25% of people who are 20 years old today will be disabled at some point before reaching age 67. That’s too high of a chance to ignore.

Disability insurance may kick in if you can still work but not in the same capacity.

Disability insurance generally comes with “any occupation” or “own occupation” rules. This determines what level of disability could qualify you for benefits.

With “any occupation” coverage, which is probably going to be cheaper for you, your insurance only starts if you can’t reasonably do any job. That means you could have to work somewhere else, or perhaps in a lower-wage position, if you are still physically able to work.

“Own occupation” means your insurance will pay if you are disabled and can’t do your own job, regardless of whether you can do something else. This is ideal, as you are probably best trained and have the best income prospects with your own job.

 

Social Security Disability Insurance is disability insurance you already have as a US taxpayer, but qualifying and receiving benefits is not easy. Definition is “any occupation ‘’

 

If you do qualify and receive SSDI, it likely won’t be enough to cover all of your monthly expenses..

If you have your own disability insurance, you could get SSDI as well. The combination of both insurance plans may take you well above 60% of your regular income.

Disability insurance covers short-term and long-term needs

Short-term disability usually works for a period of three to six months. After that, you’ll need a long-term disability policy.

Long-term disability insurance usually has a three or six-month waiting period before benefits begin. The length of the benefit period is a big factor in the policy price. These often come in periods of two, five, or 10 years, or until retirement.

Disability insurance protects your household from a complete loss of income

 

If you think going down to 60% of your income sounds tough, imagine it dropping to $0. Unless you have significant savings or a spouse with a paycheck that can carry the household’s needs, a disability could be dire. Those with disabilities may have to give up their home and move in with relatives. It could lead to relying on others completely to get by.

With disability insurance, things are not necessarily easy. If disabled, however, getting disability insurance benefits is a lot better than not having the option.

Contact – Since 1980 Diversified Insurance Brokers, Inc. 800-533-5969 Jarad@diversifiedins.com

Also – You could end up changing to a job without disability insurance or become self-employed, in which case you would need disability insurance of your own.