Don't be Left Disabled without Insurance

While no one wants to think about it, there is always the possibility that you could become disabled at some point in your life.

If that frightening prospect comes true, being insured is something you definitely want.

One study reports that one in seven workers will become disabled for more than five years at some point in their life.

Even though many people believe that disabilities are usually caused by freak accidents, most long-term absences are the result of illnesses, such as heart disease and cancer. For individuals who fall victim to such outcomes, the loss of income can be so catastrophic that it can force them to declare bankruptcy and/or foreclose on their home.

How Disability Insurance Works

For individuals not familiar with how disability insurance works, the language is pretty simple.

Disability insurance replaces part of your income should you become disabled and can no longer work.

A general group plan offered through an employer will replace up to 60 percent of one's salary. With supplemental plans and individual policies, one can expect coverage up to 70 or 80 percent. The reason that no plan covers you at 100 percent is due to the fear that you will have minimal or no incentive to return to work.

When it comes to benefits, they typically last for a period of years or until you hit your retirement age. Should you pay the premium out-of-pocket, meaning your employer doesn't pick up the tab, benefits are tax free.

For long-term disability, those policies differ greatly.

Some policies pay benefits at the time you need them, while other policies are not as reliable.

While working with an agent to determine what is best to meet your disability insurance needs, keep in mind that you select the insurance based on several different factors.

First, there is the benefit amount, which is the percentage of present monthly income you replace. Second is the length of time prior to the benefits starting. Also known as the elimination period (similar to a deductible that you would have with auto or health insurance), your typical choices would be anywhere from 30 to 180 days.

Third, there is the terms of income, whereby you can set the terms for a length of time to obtain your benefit anywhere from a year to two years (up until age 67).

Finally there is the definition of disability.

The types of illnesses or injuries that make it impossible for you to work are many times different from the forms of disabilities that instead make it difficult to be employed.