Disability Insurance Coverage

DISABILITY INSURANCE

Disability Insurance Coverage

Disability insurance pays a portion of your income if you can’t work for an extended period because of an illness or injury. We buy auto insurance for our cars, homeowners insurance for our homes, life insurance for our lives and family protection, but fail to think about the importance of disability insurance to protect our paychecks!
 

Your most valuable asset isn’t your house, car or retirement account. It’s the ability to make a living.

– GARY OWEN, OWEN INSURANCE GROUP FOUNDER

Trust me, everybody who relies on a paycheck should have this coverage. Think about how far you could go without a paycheck if you become injured. According to the Social Security Administration, almost half of American adults indicate they can’t pay an unexpected $400 bill without having to take out a loan or sell something to do so.

There are two main types of disability insurance — short-term and long-term coverage. Both replace a portion of your monthly base salary up to a cap, such as $10,000, during the disability. Some long-term policies pay for additional services, such as training to return to the workforce.

You’ll pay more the older you are and the more health problems you have

Women usually pay more because they tend to file more claims

You pay less if you don’t smoke

You’ll pay more if you work in a job with a high risk of injuries

The broader the definition of disability, the higher the premium. A policy that covers you if you can’t work in your own occupation but could earn income in a lower-paying job will cost more than a policy that covers you only if you can’t work at all.​

This is known as the elimination period. You can reduce the premium by increasing the waiting period before benefits kick in.

The more income you have to protect, the more you’ll pay for coverage

The longer the period that the policy promises to pay out if you become disabled, the more you’ll pay in premiums​

Additional features, such as cost-of-living adjustments to protect against inflation, will increase the premium