Disability Insurance Articles

Knowing Whether Or Not You Need A Disability Insurance Policy

2010-11-02

Deciding what type of insurance you need can be a complicated and confusing process. Whether to purchase a disability insurance policy is no different. When deciding if this type of insurance policy is right for you, it is important to balance the benefits of coverage against the cost of disability insurance premiums.

Like long-term care and life insurance, a disability insurance policy is a way to protect your future income and financial position. However, unlike other types of insurance, disability insurance protects you in the event you are unable to work. For many people, carrying a disability insurance policy is more important than even life insurance. Although accidents and unforeseen illness can sometimes lead to death, more often than that, they result in long-term disability that can dramatically affect a person's ability to work.

For this reason, if you depend on your regular income to support yourself and/or your family, disability insurance may be the most important insurance policy you purchase. Such a policy allows people to continue to provide for themselves, their lifestyle, and their loved ones even if unforeseen accidents or illness prevents them from working.

Although most insurance agents agree that disability insurance, also known as the forgotten insurance, is one of the most important insurance policies that a person should own, it is undeniably harder to get. Most employers offer some form of group health and life insurance. However, fewer employers offer disability insurance to their employees. Also, it is harder for individuals to qualify for disability insurance than for whole life or term life insurance policies and disability insurance premiums can vary widely.

Another important thing to understand about disability insurance is that you usually cannot purchase disability insurance to cover your entire income. This limit does not take into account investment or unearned income since those things will most likely continue even if you become disabled. Most insurers put limits on the percentage of income that the policy will pay so as to encourage people, if at all able, to return to work.

The challenges in obtaining disability insurance and the limits most insurance companies place on payout amounts should not deter you from strongly considering the purchase of a disability insurance policy. Such a policy can be a financial lifesaver for you and your family in the event that you become ill or injured and cannot continue to work. Without disability insurance, you risk the loss of your entire income if you are unable to work. Disability insurance mitigates this risk and provides much needed protection for workers.