While no one likes to dwell on worst-case scenarios, the possibility of becoming disabled during your working years is very real. One day, you’re working your way to the top of the food chain, the next, an injury, illness, or medical condition strikes without warning and completely upends your career trajectory. This is where Disability insurance can be very important.
Of course, some temporary setbacks allow for a full recovery after weeks or months away. But often, disabilities have lasting or permanent impacts that can drastically alter your ability to work and earn an income.
That’s why it’s a good idea to tap into employee Disability Insurance to cushion you in case you suffer such a setback. This guide is going to make a case for this type of insurance. Hopefully, you’ll see its benefits by the end of this reading.
1. The Odds Are Not In Your Favor
It’s easy to buy into the illusion that disability won’t happen to “someone like me.” However, statistics show that about 25% of 20-year-olds will become disabled before they hit retirement age.
This data is a reminder that disabilities can strike at any point and from any number of causes. Accidents, sure. But also illnesses like cancer, autoimmune disorders, mental health conditions, and so much more.
And when the unexpected happens, the financial fallout can be devastating without a disability insurance safety net. Missed paychecks, mounting medical bills, depleted savings – your entire standard of living can change in the snap of a finger.
However, with disability insurance, either through workplace benefits or an individual policy, you can rest easy knowing that you’ll be well taken care of during these difficult moments.
2. Your Paycheck On Life Support
Say you’ve suffered a disabling injury or illness that prevents you from working. That means no more steady paychecks rolling in. How long could you realistically survive on savings alone?
The scary reality is that most people vastly underestimate just how quickly their rainy day funds get drained when a disability puts their livelihood on life support. Within months, even years of prudent saving can evaporate.
But with disability insurance, you have a financial lifeline throwing you a critical income replacement rope. Most policies cover 60-70% of your gross income, providing a stream of benefits to use towards expenses like:
- Housing costs (rent/mortgage)
- Utilities
- Groceries
- Medical bills
- Debt payments
However, just because you’re covered doesn’t mean you’re guaranteed a payout. Remember, insurance firms are in business, and a ‘No’ to you can mean them turning a profit. That’s why you need a skilled disability insurance attorney by your side during these difficult times.
These legal professionals will help you lay a claim, argue your case with the insurance agencies, and if your claim gets denied, fight till you get the rightful compensation. Going it alone against the insurance giants isn’t a great idea.
3. Short-Term Coverage Isn’t Enough
It’s great if your employer offers short-term disability insurance as part of the standard benefits package. That coverage can be a lifesaver for temporary disabilities lasting a few weeks or months. But what if your disabling condition becomes longer-term or even permanent?
Typical short-term disability plans have a maximum benefit period of just 3-6 months. The end of this period may lead to your financial security getting decimated at the very time you need it most.
That’s why pairing short-term with long-term disability insurance can go a long way. Long-term disability kicks in after the short-term period ends, providing benefits for years or even until retirement age if needed.
4. Affordable Protection Is Within Reach with Disability Insurance
You might think quality long-term disability insurance is financially out of reach. But the reality is that this coverage can be extremely affordable, especially if offered through your employer.
When purchased as part of a group plan, disability premiums get significantly discounted through economies of scale and simplified underwriting. For example, a typical group long-term disability plan might set you back just 1-3% of your annual income in premiums. So, if you earn USD$60,000 per year, you could get coverage for as little as USD$600-$1,800 annually.
5. Customize Coverage To Your Needs
One size rarely fits all when it comes to disability insurance. That’s why it’s so important to customize your policy to align with your specific circumstances and financial needs.
Most disability plans allow you to select the right monthly benefit amount to cover your essential expenses. Typical benefit levels range from 50-70% of your gross income. The higher the benefit, the more it will cost in premiums.
You can also choose the waiting period or “elimination period” before benefits kick in after a disability occurs. Shorter waiting periods mean faster access to benefits but higher premiums.
And crucially, you’ll need to decide on how long those disability payments will last. Options can range from two years to all the way until retirement age at 65 or 67. The more comprehensive and longer-lasting the coverage, the higher those premium costs.
When making these decisions, it’s wise to touch base with insurance experts who can provide personalized guidance based on your financial situation, insurance needs, and future goals.
An independent agent or fee-only insurance advisor can objectively walk through the tradeoffs of various policy options. With their expertise, you’ll feel empowered to select the right amount of coverage at the right cost for your circumstances.
6. Protect Your Greatest Asset
Your most valuable asset and income source over your working lifetime is pretty much your ability to show up and earn a paycheck through active employment. Why risk that income-earning potential by going unprotected?
Keep in mind that adequate long-term disability coverage can safeguard your income stream and earnings capability against whatever curveballs life might throw your way. With a portion of your income insured, you have a means to cover expenses and chip away at savings much more slowly if disability strikes.
Get Covered Today With Disability Insurance
The reality is that disabilities happen far more often than you might think. And once you’ve become uninsurable due to a disability, it’s too late to obtain coverage. That said, be proactive while you’re young and healthy enough to qualify.
Lock in an affordable long-term disability policy now as part of your workplace benefits. It’s the smart way to secure your future earnings. A modest premium payment is a small price to pay compared to the alternatives of draining your life’s savings or having zero income stream if disability strikes.
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