May is disability awareness month, a reminder that it’s important to evaluate if disability insurance is part of your income protection plan.
Disability insurance provides financial protection at stressful time and is very different from other insurance products. An illness or injury can happen to anyone. Disability insurance pays you a portion of your salary when you need to miss work due to that illness, injury, or, even, having a baby. If you have a family that depends upon you, this insurance gives you an income stream if you need to take time off from work.
Every year, nearly six percent of workers every year will experience a short-term disability due to illness, injury, or pregnancy. Three quarters of these claims last up to 2.5 months, with the rest lasting from six months or a year. How will you pay your bills if you aren’t earning an income during this time?
More than one in four of today’s 20-year-olds will be out of work for 12 months or more for a variety of reasons before they reach normal retirement age. This includes common health conditions such as knee, shoulder, or back injuries, cancer, heart problems, or depression.
Are you prepared?
Think of disability insurance as a salary protection insurance. Disability insurance pays you a portion of your income when you need to miss work for as short a period as a few days to as long as until you reach your retirement age.
No other insurance product helps to cover your day-to-day expenses in this way. Health insurance covers medical bills. Worker’s compensation only pays for injuries that happen in the workplace. Disability insurance protects your income.
Types of Disability Insurance
Short-term disability insurance (STD) plans usually protect your income for between three days and six months — although some policies offer coverage for up to two years. Short-term plans typically replace between 60 and 70% of your pay, depending on the policy.
Long-term disability insurance (LTD) protects your income if you need to miss work for longer than three to six months. It usually covers 40 to 70% of your income. The time your coverage pays benefits is usually six months — so you’ll need a plan to cover costs before the payments begin (usually this time is covered by your STD plan or your savings.)
Call Us To Review Your Disability Insurance Needs
If you aren’t currently offered disability insurance at work, or the amount they are offering won’t cover your basic living costs, consider purchasing individual insurance. We can help you identify the amount you need, the most suitable amount of time you’d want to receive payments, and which plan makes the most sense for your unique needs.
 U.S. Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 1997, 2017