Your most valuable asset is the ability to make a living. Disability insurance pays a part of your income if you can’t work for a long period because of an illness or injury.
So Here’s Why You Need Disability Insurance
If you’re young and healthy and work at a desk, you may think the likelihood of being out of work for months or years of work due to an injury or illness is remote.
But according to the Social Security Administration, more than one in four 20-year-olds will have some type of disability for 90 days or more before they reach 67.
When people think of disabilities, they think of severe injuries like a spinal cord injury or loss of limbs due to a horrific accident. The truth is most disability claims are from back injuries, cancer, heart attacks, diabetes or other illnesses. These are things that can affect anyone at any time and can prevent you from working while undergoing treatment. How long could you make it without a paycheck? Chances are you wouldn’t make it very long, which is why you were working in the first place. This is where disability insurance steps in.
Understanding the Two Types of Disability Insurance
Short-term disability insurance and long-term disability insurance are the two main types. During your disability both replace a part of your monthly base salary up to a specific cap, like $10,000. Some long-term policies may pay for additional services, such as training to return to the workplace.
Individual Short Term Insurance
- Typically replaces 60% to 70% of base salary.
- Will pay out for a few months up to one year, depending on the policy.
- May have a short waiting period, such as two weeks, after you become disabled and before benefits are paid.
Long Term Disability Insurance
- Typically replaces 40% to 60% of base salary.
- Benefits end when the disability ceases. If the disability continues, benefits stop after a certain number of years or at retirement age.
- A typical waiting period is 90 days after disability before benefits are paid.
Disability policies will vary in how they determine “disabled.” Some types of policies only pay out if you can’t work any job that you are qualified to work. Others pay out if you can’t perform a task in your current occupation. Some policies cover partial disability, meaning they pay a portion of the benefit if you can work part-time. While others only pay if you can’t work at all.
If you are looking for disability insurance quote contact Blake Insurance Group today, we will be happy to go over your options and help you find the best coverage for your needs.