You’d like to think you’ll never be sidelined by a serious injury or illness. But should the unexpected happen, disability insurance can help protect your assets when you’re unable to earn a paycheck.
Am I really at risk?
According to the Council for Disability Awareness:
- Of today’s 20-year-olds, more than 1 in 4 can expect to be out of work for at least a year due to a disabling condition before they reach the traditional retirement age of 65.
- Accidents are not typically triggering events 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. Having a policy in place long before you need it is just as beneficial as planning for other future financial emergencies.
A way to protect your income
Disabled in this context typically means you’ve sustained an injury or medical condition that prevents you from working. For example, you may be sidelined by a back injury or a disease like cancer. Even a high-risk pregnancy requiring bed rest might qualify you for disability insurance.
Know your disability insurance options
There are two types of disability insurance policies — short- and long-term. Short-term disability insurance provides income replacement over a period of time – typically 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. The benefit duration is about 34.6 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 disability insurance 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 personal 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. This way you’re providing a financial safety net for your family in case you’re out of work and unable to collect a paycheck.
Article provided by Local Government Federal Credit Union.
Contact your insurance provider for additional guidance. The advice provided is for information purposes only.