A person’s ability to earn money is likely the most significant asset they have. If unable to work, who would pay the bills or manage life’s affairs? Living expenses often increase due to disability, while income is drastically reduced. Without proper protection a sudden illness or injury, for any period of time, could devastate a family’s financial plans.
The only way to protect yourself and your family from financial disaster is to maintain adequate disability insurance.
Employers can provide Disability protection as part of a group policy they offer to their employees. Disability coverage is also available for individuals.
Coverage is available for Short-Term or Long Term.
▸ But doesn't Social Security provide some protection?
Social Security includes a disability feature, but you’re considered disabled only if you can’t perform any work; you have to wait for at least five months to initiate benefits; and the amount you will receive will likely be less than half your income.
Disability insurance comes in two primary forms:
Short-term disability insurance provides benefits from the eighth day of disability up to six months of disability.
Long-term disability insurance generally kicks in after the first six months of disability and typically pays benefits until age 65. Employer-sponsored, long-term disability insurance may provide own-occupation coverage for a period of up to two years. At the end of that two-year period of time, or in most cases from day one of your disability, the disability insurance policy pays benefits only if you’re unable to do any meaningful work that you’re reasonably trained to do. Insurance that guarantees to pay if you’re unable to perform the duties of your occupation is substantially more expensive than a policy that guarantees to pay benefits if you’re unable to work at all.