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If you have disability insurance, you are assured of an income
when you are unable to work on account of an accident or illness.
It has been observed that on reaching 40, the average worker faces
only a 14 percent chance of dying before he/she reaches 65 but a
21 percent chance of being disabled for 90 days or more. This piece
of statistics must be alarming enough for anyone to consider having
disability insurance so that the person can protect him/herself
in the event he/she loses the ability to work for months, or even
years. Disability statistics reveals that heart disease and back
problems are the two most familiar causes of disability and more
people lose their homes through disability than through fire or
death. In any case, it makes perfect sense and causes no harm if
you decide to purchase disability insurance for supporting yourself
and your family in anticipation of any such eventuality. In case
you are single and disability arising out of an accident or illness
forces you out of work for days, months, or even years, you may
have no other means of support. If you are married, you may depend
on your spouse for income, but even that may not solve all your
financial problems. So it is wise for everyone who works and earns
a living to buy disability insurance.
Those who are content with the knowledge that they are adequately
insured against disability because of having coverage through their
employers or through government programs such as Social Security
and workers' compensation should be aware of the fact that only
50 percent of employers cover short-term disability, and only 40
percent cover long-term disability. They may receive benefits from
government programs, but only after meeting a stringent definition
It is, therefore, prudent not to rely solely on Social Security.
In addition to rejecting almost half of the total number of claims
submitted, Social Security will not begin paying you until at least
six months after you become disabled. The benefit you receive is
much less than your pre-disability income as well. Workers’
compensation can benefit you only if your disability is work-related,
and its amount depends on the state you live in. Some states just
cover the diseases or disabilities outlined in that state's workers'
There are some government and private pension plans that will give
you disability benefits. These disability plans mostly provide benefits
based on total, permanent disability, or reduce your retirement
benefit in proportion to what you have already received for a disability.
You should also keep it in mind that these benefits are generally
integrated with Social Security or workers' compensation. As a result
of such integration, your benefit may be less than you expect if
you also receive disability income from these government sources.
So an individual disability income policy is perhaps the best way
to ensure adequate income in the event of disability. If you purchase
a private disability income policy, you can hope to replace from
50% to 70% of your income. Insurers are not going to replace all
your income because they want you to have an incentive to return
to work. If you pay the premiums yourself, disability benefits are
For buying disability insurance, you should consult an agent or
your state's insurance department for necessary information. You
must understand what you are buying and never hesitate to ask your
agent to explain exactly what is in the policy. The most important
things to consider when you buy a plan include the definition of
disability, benefit period, a cost-of-living increase in benefits,
a policy paying partial benefits, transition benefits and financial
stability of the insurance company.