If you depend on the income you receive through work to pay your expenses, then you should probably consider disability insurance. It ensures that you can continue to receive partial income if you end up too sick or injured to work.
Disability insurance provides partial income so you can pay your bills if you get too sick or injured to work. Disability happens to more people, more often than you may think. In fact, more disabilities are caused by illness than injury, including common conditions like heart disease and arthritis, and most disabilities are not covered by Workman’s Compensation.1
Some employers will offer short and long-term disability benefits to their employees. A short-term policy helps you immediately after an incident, and a long-term policy helps provide financial protection for disabilities that can last for years. You can also pay for additional coverage on top of the benefits you get at work to help provide extra financial protection.
- Who is it for?
- How does it work?
- Why do I need it?
Who is disability insurance for?
People may incorrectly assume what qualifies as a “disability.” For example, they may believe the term applies to catastrophic conditions, such as paralysis from a car accident or a debilitating stroke. However, disabilities typically are the result of less severe injuries and more common conditions such as pregnancy, back pain, depression, and digestive disorders.
An analysis of Guardian disability claims shows “mental health,” which includes substance abuse, as one of the fastest-growing diagnosis categories in the past five years, along with digestive and circulatory.2
- Disability definition
- It gives you money after an illness or accident
- Small business owner protection
- Financial wellness
Every disability policy has a specific definition of disability that you must meet in order to get benefits. The two most common definitions used by disability insurance companies are:
- Own occupation: a person is considered disabled if they are no longer able to perform the occupation they had prior to becoming disabled.
- Any occupation: a person is considered disabled if they are unable to perform any job at all.
Being disabled doesn’t mean one is unable.
Meet Dr. Feranmi Okanlami. After suffering an unexpected accident, his disability insurance helped him continue to pursue his dream, while also opening up new avenues for him to find success. Watch his story to find out more.
- Group (through work)
- Short term
- Long term
Individual disability insurance
Individual disability insurance can be ideal for anyone who doesn’t receive disability insurance through work. It’s also an option for high earners looking for extra coverage. Not only can you buy this policy on your own, it also stays with you even if you change jobs.
- How much do I need?
- Custom options
- How to get it?
- Other FAQs
How much disability insurance do I need?
First, use your income needs as a guideline to determine your monthly benefit payout.
Then look at the disability insurance offered through your job and determine if that’s enough. Generally, you would be reimbursed around 40 to 60 percent of your pre-disability salary. A supplemental disability income insurance plan, either obtained through work or independently, can cover a portion of income that basic insurance may not.
Finally, the longer you are covered, the more you are paid. Plus, some professions have time limits. Office workers can generally be covered up to age 65.