Most of us understand the need for insurance for our health, home and car. But what about insurance if injury or illness would take away your ability to bring home a paycheck?
It may be hard to think about being unable to work when you’re in good health. But the chances that you’ll miss work due to a long-term or permanent illness or injury are greater than you may realize. Just
We’ll review some of the common questions that people ask about disability insurance.
What happens if I don't have disability insurance?
Simply, you put your financial stability at risk. You’ll have to find a way to cover your financial obligations without a paycheck.
While you may have personal savings to draw on in an emergency, how long would your
Is my employer group disability insurance coverage enough?
It’s common for people to believe their coverage through their employer is enough. But Steve Sperka, vice president of Health Insurance Products at Thrivent, encourages you to think about two things as you review your financial strategy.
“First, how familiar are you really with the amount of coverage you have from your employer? Most employer plans don’t cover your entire salary,” Sperka says. “They cover a portion, and that portion typically will be taxable because your employer is paying the premium.”
A key question to consider: If something were to happen to you, would you be comfortable living on 50% or 60% of your salary?
Second, it’s important to recognize that coverage from your employer is only connected to that employer, Sperka says.
“If you decide to change employers, you’ll likely lose your coverage,” he says. “You’ll then have to count on the coverage of the next employer or purchase your own. And you can’t guarantee your health or that you’d even be eligible to purchase coverage on your own.”
Having individual disability insurance puts you in control, Sperka says.
“You can have it at the level you want for you and your family,” he says. “And it’s portable—it goes with you to the next job.”
Typically, you can purchase individual disability insurance that wraps around your current employer plan, covering up to 75% of your total income. And the money from your personal contract likely wouldn’t be taxable, Sperka says.
How familiar are you really with the amount of coverage you have from your employer? Most employer plans don’t cover your entire salary. They cover a portion, and that portion typically will be taxable because your employer is paying the premium.
Is disability insurance expensive?
Disability income insurance may be cheaper than you think. Typically, the average annual premium is 1% to 4% of your adjusted gross income.*
Does Social Security cover disability benefits?
Social Security disability insurance, also known as SSDI, is a program that can provide benefits to people who meet the definition of disability under the Social Security Act. You must qualify for the benefits, which can be paid to the disabled person and their dependents. Many applications for Social Security disability benefits are denied at first, and it could take up to two or three years to complete an appeal.
The average monthly
What does disability insurance cover?
Disability insurance covers serious health conditions and long-term illnesses as well as accidental injuries. If something is excluded from coverage, such as pre-existing conditions or certain occupations or situations, it will be detailed in your contract.
At the time of purchase of an individual contract, you can designate how long you want benefits paid: 12 months, 24 months, 60 months, 10 years or age 67. You also can determine if you want your contract to pay out a portion of benefits if you’re partially disabled.
Will I qualify for disability insurance?
If you are healthy, you would likely be qualified to purchase disability insurance. However, some pre-existing health conditions may impact your ability to qualify.
Get help protecting your income
Want to learn more about disability insurance?