Financial
Disability Insurance

If you became ill or injured and couldn't work, how would you pay your bills?

Would you be able to maintain your standard of living? Protect yourself and your family with disability insurance, which replaces a portion of your income when you are unable to work due to injury or illness. 

  • One in 3 working Americans will become disabled for 90 days or more before age 65. *
  • The average disability absence is 2 and a half years. *
  • More than 80% of working Americans don't have disability income insurance or aren't covered adequately. **

Age

Likelihood

30

4 to 1

35

3.5 to 1

40

2.7 to 1

45

2.1 to 1

50

1.8 to 1

55

1.5 to 1

The two major types of disability coverage are:disability insurance

  • Short-Term Disability - Short term disability provides income for the early part of a disability.  A policy may pay benefits for two weeks, or up to two years.  Short-term disability is often included as part of an employee benefits package.
  • Long Term Disability - Long term disability helps replace income for an extended period of time, usually ending after five years or when the disabled person turns 65.  There are two major types of individual long-term disability insurance:  noncancelable and guaranteed renewable.

When Are You Considered Disabled?
The definition of disability varies depending on the policy purchased.  For example, some plans pay when you're unable to engage in your own occupation, while others pay when you're unable to engage in any occupation for which you're reasonably suited based on your training or experience.  Many disability plans require that you not be gainfully employed while you're collecting benefits.

When Will Benefits Start Accumulating?
Most long term disability plans have a waiting period before benefits begin accumulating.  The most common waiting period is 90 days, but many times you can get as low as a 60-day waiting period, as well as 180-, 365- and 730-day waiting periods.  The length of your waiting period should be determined by asking yourself how long you can go without a paycheck.  Longer waiting periods offer lower premium payments.

How Much Disability Insurance Do I Need?
You normally should plan on replacing at least 60% of your net (after taxes) pay, and preferably 80% if you can afford the additional coverage.  To estimate how much disability insurance you should have, calculate how much you spend each month. 


For More Information
Contact a financial service professional at 800-444-1974 to ensure that you can recover financially in the event of a disability.