According to the CDC, 61 million American adults live with some type of disability. With such a large portion of the American population living with a disability, disability insurance can be a life-changing asset for millions of people. For those who are not sure what disability insurance is, it is a form of insurance that provides you with a percentage of your income if an illness or injury prevents you from working and earning a living.
There are two main types of disability insurance: long term disability insurancewhich usually pays a portion of your lost income for anywhere from one year to the rest of your working life, and short term disability insurancewhich replaces a percentage of your lost income for a short period of time—typically, between three and six months.
Disability insurance is arguably one of the most misunderstood types of insurance. Many people believe that it is unnecessary or irrelevant to them. But according to a 2022 Insurance Barometer study, half of Americans (49%) say their family will face financial hardship within six months or less if their primary wage earner becomes ill or injured.
Here we’ll discuss some of the biggest misconceptions about disability insurance and explain why it might be worth investigating for yourself or your loved ones.
1. I can’t get disability insurance if I don’t work full time.
Many people believe that you must be working full time to qualify for disability insurance, which is not true. As long as you meet disability insurance eligibility requirements and can prove you are losing wages you otherwise could have earned, you may qualify for disability insurance. It is important to properly evaluate your situation to determine if disability insurance is right for you, regardless of your employment status. To get an estimate of how much coverage you’ll need to maintain your current standard of living, visit Life Happens’ Disability Insurance Needs Calculator.
2. If I’m healthy, I don’t need disability insurance.
Even if you are in good health now, don’t write off disability insurance. The fact of the matter is that if you rely on a paycheck to provide for you, disability insurance is worth exploring. Many people do not understand that there is always the possibility that you could become ill or injured and be unable to work in the future. In fact, 1 in 4 workers entering the workforce today will suffer a disability before they retire, Disability can happen to anyone at any time. Disability insurance can be of great help if something impairs or impairs your ability to work and earn a living.
3. Disability insurance is very expensive.
The cost of disability insurance typically ranges from 1% to 3% of your annual salary and depends on a number of factors, including age, gender, current health status and occupation. For example, in general, the younger you are, the healthier you are. Disability insurance rates will likely reflect this. Disability insurance rates tend to be higher if your occupation requires hard physical labor, dangerous equipment or handling hazardous conditions.
There are other factors that will affect the cost of disability insurance, such as benefit duration and amount, elimination period, and more. It is important to explore all premium options when you are searching for disability insurance because the cost will depend on your specific situation.
Working with an insurance professional is a great way to learn more and get coverage. Check out this helpful information on how to choose the right insurance professional. Then use this to locate a Life Happens agent locator in your area.