Why Do People Need Disability Insurance?

Many people do not realize what would happen if they become disabled and lose their ability to work. Statistics show that approximately 43 percent of individuals between the ages 35 and 65 will become disabled for 90 days or more. If you lose your ability to work and make a living, disability insurance will help you pay your bills, save for retirement, and make your mortgage loan payments. This type of coverage will replace up to 60 percent of your gross income in case you become disabled. Supplemental plans will cover 70 to 80 percent of your salary.

This type of insurance is specifically designed for working men and women. Since accidents and illnesses occur when you expect the least, collecting disability benefits will help you maintain your standard of living and pay for ongoing expenses. Studies have shown that over 30 million Americans between the ages of 21 and 64 are unable to work because of a long-term illness or injury. In order to receive disability benefits, you need to be a benefit-eligible employee or have a disabling condition that qualifies for benefits.

Long term insurance provides coverage for catastrophic illness or injury. This type of policy kicks in once your short-term disability plan runs out. Insurance companies offer policies that vary in the length of payout. Some of these insurance plans will pay out for up to 10 years, while others will pay out benefits until age 65.

As its name suggests, short term disability insurance offers coverage for a limited period of time. The average duration of benefits is six months. The number of weeks you are eligible for disability benefits depends in how many years you worked for your current employer. Hawaii, Rhode Island, California, New York, and New Jersey require employers to provide short-term disability insurance. Short term policies usually have waiting periods ranging from 0 to 14 days. If you purchase long term disability insurance, you will have to wait 30 to 720 days before receiving any benefits. Long term coverage is typically more expensive that short term disability insurance because it covers extended health care at home, assisted-living facilities, or nursing homes.

If you are self employed, consider buying an individual plan. Many companies provide disability insurance online. All you need to do is to search for a well established insurance website and then complete a brief form with relevant details such as your age, gender, health condition, occupation, and income. Based on the information provided, you will receive disability insurance quotes from several companies. After choosing three to five quotes, compare them side-by-side. Select a policy that offers comprehensive coverage at reasonable rates. Keep in mind that many insurance providers offer discounts of up to 40 percent for buying coverage through their websites.