As I grow older and now that I have a child, I am becoming more aware of the importance of insurance, and especially disability insurance. It is not a very talked about thing, in fact, I had never really heard of it until a few years ago. So here is a good Google definition of disability insurance. “Disability Insurance is the industry name for a plan that provides for periodic payments of benefits when a disabled insured is unable to work. The insurance product is designed to replace most of your gross income on a tax-free basis should illness keep you from earning an income in your occupation. A professional with a family, for example, should consider disability insurance a necessity. ” 1
Don’t I already have coverage from my work?
Most employers have workers compensation coverage which is similar to disability insurance, but only applies to disabilities/injuries that come from the workplace. If you are disabled by something that happens outside of work, then you are out of luck. That is unless you have disability insurance. Also, even if you are getting paid by workers compensations, you can still receive income from your disability insurance.
Doesn’t the government have disability coverage?
SSDI or Social Security Disability Insurance is coverage that anyone who has recently worked and payed in to Social Security qualifies for. The issue with relying on this coverage is that the average monthly benefit is only $1148. 2. That is under $14,000 annually. I don’t know many families that can live on that amount. Also you can receive benefits from both SSDI and private disability insurance. Another issue with SSDI is that it is the much more limited definition of disability as compared with private disability insurance. Many people are denied SSDI when they are not “fully” disabled, but cannot do any work in their industry due to their disability.
Disability Insurance Options
When you get disability insurance you have the option of choosing the monthly benefit amount and length of time you can receive that amount while disabled. The bigger those numbers, the more expensive it is. There is also a feature called Return of Premium you can add to your policy. This makes it so that if at age 67 you get back all of the money you have paid in premiums minus any claims you have received. Thus, it can be a type of a retirement savings account, that also protects you during disability.
Pricing
An average healthy worker in a non labor field can get basic coverage for a very reasonable price of around $20 a month including return of premium. For more extensive coverage the price would be closer to $40 or $50 a month. Contact me for a free quote.
By Jimmy Hancock
- NAHU. “Consumers Guide to Disability Income Insurance.” NAHU.org. National Association of Health Underwriters, n.d. Web. 16 May 2016.
- Thomson Reuters. “Private Disability Insurance vs. SSDI.” Findlaw. Thomson Reuters, n.d. Web. 17 May 2016. <http://injury.findlaw.com/accident-injury-law/private-disability-insurance-vs-ssdi.html>.