Yes, disability insurance is really paycheck insurance and protects your income stream in the event an accident or illness prevents you from working. There are two type of disability insurance; Short Term & Long Term disability. Short term plans usually cover periods of 13 or 26 weeks. Long Term plans, as their name implies, run for longer terms that can go on for years depending upon the policy.
It is estimated that a 20 year old has a 25% chance of being disabled for some period of time before they reach retirement age. Currently 12% of the U.S. population is disabled with only 5% of those disabilities being work related. So, a health problem or off the job accident is the most likely cause of someone becoming disabled. A recent report shows the average Social Security Disability payment is $1065 per month and qualifying for Social Security disability is famous for being difficult and time consuming with waits of 2 years for approval not being uncommon and as of 2009, only 30% of Social Security disability claims were approved. Relying on Social Security alone to preserve your lifestyle in the event of a disability is unwise.
The majority of persons who experience a disabling event can return to work within about 90-days. But, for persons who experience a disability exceeding 90-days the average length of these types of disabling events is 3.2 years!
Ideally, a person will have both short term and long term disability insurance protection. Short term disability insurance will be less expensive and if your budget doesn't allow for both coverages I would suggest starting out with short term coverage for the longest coverage period possible. If you are a female I would also recommend that you verify how a prospective short term disability policy treats maternity. Some policies treat maternity as a disabling event while others do not. This can be an important difference for a woman in her child bearing years.
That is a great question! I believe that if it's in your budget to afford a disability policy, that everyone should have one. These types of policies are great "paycheck protection", as they can be lifesavers when something happens, and you are unable to work. Relying on workman's comp or SSI Disability isn't wise. I hope that helps, thanks for asking!
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It is estimated that a 20 year old has a 25% chance of being disabled for some period of time before they reach retirement age. Currently 12% of the U.S. population is disabled with only 5% of those disabilities being work related. So, a health problem or off the job accident is the most likely cause of someone becoming disabled. A recent report shows the average Social Security Disability payment is $1065 per month and qualifying for Social Security disability is famous for being difficult and time consuming with waits of 2 years for approval not being uncommon and as of 2009, only 30% of Social Security disability claims were approved. Relying on Social Security alone to preserve your lifestyle in the event of a disability is unwise.
The majority of persons who experience a disabling event can return to work within about 90-days. But, for persons who experience a disability exceeding 90-days the average length of these types of disabling events is 3.2 years!
Ideally, a person will have both short term and long term disability insurance protection. Short term disability insurance will be less expensive and if your budget doesn't allow for both coverages I would suggest starting out with short term coverage for the longest coverage period possible. If you are a female I would also recommend that you verify how a prospective short term disability policy treats maternity. Some policies treat maternity as a disabling event while others do not. This can be an important difference for a woman in her child bearing years.