Disability Income Insurance
Disability Income Insurance is protection that insures earned income against the risk that a disability will make working, and therefore earning money, impossible. It includes paid sick leave, short-term disability benefits and long-term disability income. According to the Social Security Administration, more than a quarter of today's 20 year olds will become disabled at some point during their working career. It does not have to be a traumatic injury that prevents you from working. Often times it's a back injury, cancer diagnosis, heart disease or other illness, such as a stroke or even a severe case of shingles, as the reason for long-term absences.
Are you prepared if you can't work due to a long term disability? The average long term disability lasts 2 1/2 years. Do you have the emergency savings to cover that amount of time away from work? If not, you may want to consider disability income insurance.
Group Disability Insurance
Group disability insurance is mandated by most states so a portion of protected income may exist for you if you are an employee of a company. Employers differ as to the type and amount of coverage they offer. Only about half of employers across the spectrum offer group disability insurance and many employers offer income protection coverage only in the form of sick leave. Most employee based group disability plans are not guaranteed in any way and can be terminated at any time the employer or the insurance company decides to stop offering it, even if you are actively on the plan. Know what coverage you have available to you either thru your state or your employer directly. Then ask yourself if it's enough in the event you need it. If your employer offers a portion of that picture, know the stability of your company or, best option, get your own disability income coverage and take the other worries away.
Individual disability insurance offers multiple options for coverage and a policy can be tailored to your needs. Furthermore, since individual disability insurance policies are paid with after tax dollars, you don’t pay taxes on the benefits you receive on an individual disability claim. Be certain your income is insured and that your take home pay will be as close to what it was pre-disability so you can continue living the same lifestyle, regardless of what happens.