We all want to live a life where we are free from accidents that could alter our lives permanently. But, if an accident happens to you or your family, it is best if you are financially prepared. Today, there are various options available when choosing disability insurance. You just have to do your own research in order to find the best insurance product best for your situation.
What is it?
If an illness or injury prevented you from working, disability insurance can cover a large percent of your salary. It covers a broad range of disabilities including physical injuries from accidents, heart attacks, comatose, and cancer. In the United States, Americans can get disability insurance through the Social Security Administration (SSA).
Do you need it?
The SSA found that one in four people age 20 years and up will have a disability before reaching the age of 67. Don’t sleep on the possibility that you can get ill or injured while working. It is important that you plan for the long-term not just for your protection, but also for your family or other people who rely on your income.
If you have an emergency fund and think that it can cover all your expenses when something bad happens, think again. Long-term disability insurance can cover your income for several years as long as your disability continues.
Types of disability insurance
The two types of disability insurance are short-term and long-term. In terms of the extent of your income that it can cover, short-term insurance can cover around 60-70% while long-term can cover around 40-60%. Short-term lasts typically for three to six months, while long-term lasts for several years if your disability continues.
Cost and coverage
Short-term and long-term insurance premiums are worth about 1-3% of your income. The cost varies depending on many factors. For example, the older you are, the higher the premiums are.
Like any insurance policy, your lifestyle can also affect the cost of premiums. If you smoke or do activities that can make your health go down, you would have to pay a larger premium. How much you make will also affect the cost because your insurance would depend on your salary.
It is important to note that disability insurance will just cover a percentage of your income. It will not cover additional expenses like long-term care and hospital bills. For complications in pregnancy, long-term disability insurance can apply as long as you have it before you get pregnant.
How can you get it?
The best option when applying for disability insurance is with your employer. Some companies do offer a long-term disability insurance plan. If in case they do not offer any, the alternative option is to contact an insurance professional who can help you choose a private insurance provider.
Now more than ever, we need to get ready if in case we deal with a disability. Although a disability insurance does not really give our abilities back, financial aid can largely help us deal without situation.