Data from the Centers for Disease Control and Prevention (CDC) reveals that a whopping 61 million adults in the U.S. live with some kind of disability. Depending on the severity of the condition, disability can make the victim unable to work and drive them into a financial crisis. Fortunately, disability insurance shields you in such instances by replacing about 60% of your pre-injury income every month for the time you are disabled. Important as this coverage is, many Americans don't have it. This is largely due to the common disability insurance misconception, which includes:
While it is true that disability insurance will not help you if you are healthy, it will come in handy in case you become disabled. Disability is unpredictable as it can emanate from accidents, pregnancy, illnesses, and even aging. It is worth noting that regardless of your health status, disability insurance is necessary. It will protect you from financial woes if you get disabled and lose your ability to work. Also, if you work in a high-risk industry such as construction or transport, ensure you purchase disability insurance even if you aren't disabled.
The cost of disability insurance coverage varies based on factors such as age, health history, gender, income, occupation, size of coverage, and type of policy. The insurance provider will likely charge you high premiums for disability insurance if you turn out to be high-risk. However, the cost of disability insurance is relatively low compared to how much you stand to lose in case you become disabled while uninsured.
Disability insurance typically reimburses a portion of the policyholder's pre-injury earnings. This is unlike health and life insurance policies that cover the cost of treatment during sickness and payout death benefits to the beneficiaries in the event of the policyholder's death, respectively. While these two policies are still necessary, they will not shield you financially if you become disabled and unable to work.
While disability is unusual, factors such as occupation, age, and health status can increase your chances of getting disabled. To give you an idea, research by the American Bar Association (ABA) indicates that at least 25% of today's 20-year-olds will suffer some form of disability before retirement. Therefore, it is a good idea to plan for such an eventuality. One way to do that is to carry disability insurance.
Worker's compensation insurance pays for lost wages and treatment expenses for employees who get injured at the workplace. In case of a disability, this policy can also cover a small portion of the resulting expenses. Similarly, Social Security Disability Insurance pays out disability benefits to any disabled employee who has been working and paying social security taxes. Unfortunately, these two insurance policies don't cover all disabilities, and the payout is usually small.
Being aware of each disability insurance misconception is the first step towards avoiding common disability insurance mistakes. Contact our experts at Kneller Insurance Agency for more information on getting the right disability insurance coverage for your needs at rates you can afford.
