When you think about insurance, what comes to mind? Insurance for your home, for your car? Perhaps you think of health insurance. Have you ever thought about insurance that helps take care of you if you become disabled and cannot work?
Most people don’t think about disability insurance—or if they do, they usually think of other people who might need it, but not ever themselves.
Disability insurance can help replace your income in the event you are unable to work, but it’s a type of insurance that many people are unfamiliar with.
Here are five things you need to know about disability insurance.
There are two types of Disability Insurance
Short-term disability insurance generally covers you when you cannot work for up to six months. Long-term disability may begin anywhere from three months to six months after you become disabled and can continue until you are able to return to work or until you reach a certain age, depending on your policy.
Workers’ Compensation is NOT the same as Disability Insurance
While workers’ comp insurance is required in every state, it only covers you if you are injured or disabled as a result of your job. According to one study from the National Safety Council, only about 25% of all long-term disabilities come about as a result of work. If you do happen to become disabled as a result of your job, whether permanently or temporarily, you will generally receive about two-thirds of your regular income.
Most States Do Not Offer Disability Insurance
If you are fortunate enough to live in New York, New Jersey, Rhode Island, California or Hawaii, you are already paying for short-term disability through a payroll deduction system. If you live in any one of our other 45 states, you are not so fortunate. Those states do not have a state disability insurance system and you will have to rely on your employer or purchase your own insurance.
You Can Purchase Private Disability Insurance
That’s right—you are not at the mercy of the state you live in or your employer. You can purchase disability insurance through an independent insurance broker like Roper Insurance. Unlike a policy you purchase as part of your group health plan, this policy will remain in force as long as you pay your premiums, regardless of whether or not you stay at the same job. Most disability insurance plans will cover from one-half to two-thirds of your income, and if you choose to pay your premiums with after-tax dollars, the benefit payments, should you become disabled, will be tax free.
Social Security Probably Isn’t the Answer
You may have heard that Social Security provides disability benefits, and they do—but it is not a substitute for disability insurance. The Social Security disability benefit only covers those who are totally disabled and cannot work at all. According to the Social Security Administration 65% percent of applicants are denied coverage.
Disability can strike anyone, anytime. Studies show that one in four workers can expect to experience at least one period of disability during their careers. Whether you purchase private disability Insurance or take advantage of a disability insurance plan offered by your employer, protecting your income against the unexpected is a wise financial move. For more information on disability insurance and the best disability plan for you, click the contact button at the top of this page, or give the insurance experts at Roper Insurance a call today at 303-721-1145.