Disability income insurance provides you with replacement income if you are unable to work due to an illness or injury. Disability income insurance can help cover your medical bills, your house payment and other monthly expenses.
What's the benefit of having disability income insurance?
One of your most valuable possessions is your ability to earn a living. Take away your income and it’s amazing how quickly you could incur large debt -- just trying to cover your regular monthly expenses.
Plus, an individual disability income insurance product is "portable." That means you own the policy and it stays with you even if you change jobs.
What are the different types of disability income insurance?
Disability income insurance policies for individuals typically come in one of these two forms:
- Non-Cancellable: Guarantees that as long as you pay the premiums, your DI policy can’t be cancelled, and your premium rate will be locked in for a set number of years. This policy is available for people working in professional, executive, white-collar and gray-collar technical occupations.
- Guaranteed Renewable: Guarantees that you can renew the policy with the same benefits as long as you continue to pay the premiums. There is the possibility that your premium will increase. This policy is available for skilled technicians, on-site supervisors, manual laborers and people working in certain unskilled trades.
- Business Overhead Expense: Reimburses small-business owners for the expenses needed to maintain the business as a going concern if an owner is disabled.
- Buy-Sell: Provides the funds to assist in the purchase of a disabled person's ownership interest in a partnership or other small business.
Just about everyone. Whether you're single, married, have children, or own a business, a disability that keeps you out of work can be costly. To maintain your standard of living in the case of a disability, it's important to have this coverage.
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Insuring against disability has not been a high priority for most workers because many assume they're already covered through Social Security, Workers' Compensation or employer plans.
It can happen to you.
Nearly one in four men can expect to suffer a disability that keeps them out of work for 90 days or longer at some point during their working years. For women, the odds are about one in three. And one worker in seven can expect to be disabled for five or more years before retirement.*
Your questions answered ...
Q: I have disability coverage through my employer. Is that enough?
A: If your employer offers disability coverage, take the time to find out if it's sufficient to meet your income-replacement needs. If it's not, you can purchase coverage on your own. One of the benefits of individual coverage is that it stays with you even when you change jobs.
Q: How much disability income insurance do I need?
A: Find out by using this simple calculator from the nonprofit Life and Health Insurance Foundation for Education, or by discussing your situation with us.