You’d like to think you’ll never suffer from a serious injury. But should the unexpected happen, disability insurance can help protect your assets if you’re unable to earn a paycheck.
Am I really at risk?
According to the Council for Disability Awareness:
- Over one in four of today’s 20-year-olds will become disabled before they retire.
- Accidents are not typically the triggers for disability insurance. Back injuries, cancer, heart disease and other illnesses cause most long-term absences from the workplace.
But there’s good news. Disability insurance can help you prepare for disability the same way you plan for other emergencies.
Protect your income
If you don’t have disability insurance, or enough emergency savings to last about three years — which is the duration of the average long-term disability claim — you could easily drain your account. Accumulated sick time or paid leave may be used up faster than you realize. Disability insurance can help fill the income gap. On average, you may qualify for 60 percent of your income if you become sick or hurt, and unable to earn income.
Know your disability insurance options
While your doctor must determine if an illness or injury has left you unable to perform your job, your policy’s definition of disability will dictate whether you qualify for benefits. There are two types of disability insurance policies — short- and long-term. Short-term disability insurance provides income from 13 weeks up to two years. The policy usually activates after a waiting period, which can be up to four weeks. In some cases, if an accident disables you, your policy may allow you to receive benefits immediately.
Long-term disability insurance provides income for longer periods including up to retirement age. The waiting period is often anywhere from one to 30 months, but the benefit duration is about 60 months. If you have both short- and long-term disability policies, you must use all of your short-term benefits before your long-term benefits take effect.
How to get coverage
The most affordable way to get disability coverage is through your employer, if available. Talk to your human resources representative about your options. Then have the premiums deducted from your paycheck. Your insurance agent may be able to provide a policy too.
A slip and fall, or serious medical emergency could keep you out of work for an extended period. Consider disability insurance now to cover a “just-in-case” event later.
Article provided by Local Government Federal Credit Union.
The advice provided is for informational purposes only. Contact your insurance agent for additional guidance.