What is Disability Income Insurance?
Disability Income Insurance is a form of insurance that insures the beneficiary’s 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 benefits.
Who Needs Disability Income Insurance?
More than a quarter of today’s 20 year olds will become disabled, according to the Social Security Administration (SSA). No matter what job you have. It does not have to be a freak injury that prevents you from working – back injuries, cancer, heart disease or other illnesses are the majority of the reasons for long-term absences.
Are you prepared if you can’t work due to a long-term disability? The average long-term disability last 2 1/2 years; do you have the emergency savings to cover that long away from work? If not, you need to make sure you have long-term disability insurance.
Group Disability Insurance
Group insurance is mandated by most states, but employers differ as to the type of coverage offered. Many employers offer income protection coverage in the form of sick leave. About half of employers offer group disability insurance. Benefits from group disability insurance typically last until the retirement age. Most 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.
Individual Disability Insurance
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.