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Your Disability Insurance Options
Who Needs It?
If you have a job, it is likely you need disability insurance. Statistics say that the possibility of becoming disabled through injury or illness is a real risk for all of us.
The questions we all must ask ourselves are:
How would you be able to maintain your standard of living if you were too ill or injured to work for an extended length of time?
What expenses would a disability add to your current standard of living (medical, home modifications, unforeseen needs)?
A 25-year-old worker who makes $50,000 a year and suffers a permanent disability could lose $3.8 million in future earnings.
All of us that are currently working need to consider how we would manage our lives in the event of a disability and create a plan to self-insure or consider disability insurance.
All states require that employers provide Workers Compensation to employees. This only covers you if you suffer a disabling illness or injury that is work related. Generally, it pays about two-thirds of the income you had prior to your disability.
The federal government administers a disability insurance program that covers most workers, but qualifying for benefits isn’t easy, and it may not provide enough for your current lifestyle and needs.
The majority of employers provide some level of disability insurance in a group plan, or may offer it as a supplemental option. They usually provide short-term disability (STD) (which provides income for about three months in most cases), and long-term disability (LTD) (which provides income for longer periods). The benefit of group disability coverage at work is that you don't need to health qualify in order to obtain coverage in most cases. Check with your human resources department to see what options your company’s plan provides.
Individual Disability Insurance
The most reliable and flexible disability insurance coverage is an individual policy that you purchase on your own. As the owner of your policy you can control gaps in coverage between jobs or losing coverage all together if a company doesn't offer it as a benefit.