Why Disability Insurance Could Save Your Life

Javi Calderon

Why Disability Insurance Could Save Your Life

Are you a single parent? Are you the sole provider for a young family? Who would or could pay your bills if you were unable to work? You might think, I’m a receptionist- or I’m an IT specialist- or I’m an accountant, I won’t get injured. But, injuries don’t only happen to construction workers and weekend sports enthusiasts. Injuries are accidents, and accidents can happen to anybody.

Adults under the age of 65 are 4 times more likely to be disabled than to die, meaning that disability insurance might be a better investment than a life insurance plan. If you get injured and are unable to work, disability insurance literally saves your life by allowing you to continue making mortgage, car and utility payments while you are on the mend.

Disability insurance offered through an employer insurance plan can be skimpy, and you are likely to be taxed if you choose to use those benefits. Social Security offers disability benefits, but it can take years to file and be approved for a claim. If you buy your own disability insurance plan, you can customize the coverage to meet your needs, and you won’t be taxed for using it.

Unfortunately, you can’t get 100% of your salary covered under disability insurance. In fact, the maximum the insurance company will cover is 60%, and most people receive much less than that. A young adult making $50,000 a year might be able to get 60% of their income covered. Someone making $300,000 is more likely to get around 40% coverage. Remember, the coverage plan will be based on your salary when you take out the policy, so if you change jobs, or get a big raise, you may want to recalculate your plan reflect your increased income. Expect to pay about 2 to 3% of your income towards disability coverage.

Insurance providers establish coverage groups, as they do in any kind of insurance. Obviously, for disability insurance the brackets are broken up using variables like profession, age and gender. Obviously, the higher risk occupation, the less the insurance policy will pay out and the more expensive it will be. A doctor may be able to take out a 10-year policy, while a construction worker will only be able to find a 5-year policy.

With so many variables in play, shopping around will give you the best opportunity to get the most for your money. Especially if you live an active lifestyle, don’t leave yourself at risk to lose everything you have worked so hard for. Don’t let an accident cost you your life. 

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