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Your Ability to Handle Disability

Many people avoid contemplating how they would handle their family’s living expenses should their income suddenly cease due to an unexpected illness or injury. Perhaps they believe an injury or illness will never happen to them. However, the statistics tell a different story.

According to the Insurance Information Institute (III, 2013), 43% of all people age 40 will have a long-term (lasting 90 days or more) disability event by age 65. In fact, an individual between the ages of 40 and 65 has a greater chance of missing at least three months of work due to an accident or illness than of suffering an untimely death. Indeed, the average recovery period runs a lengthy two and a half years. This is why disability income insurance can play an important role of your overall financial plan.

Protect Your Most Valuable Asset

Disability income insurance protects your most valuable asset—your ability to earn an income. You pay a periodic premium, and in exchange, if you are disabled and cannot work, the insurance company promises to pay you a predetermined benefit amount.

In order to obtain the appropriate type and amount of disability income insurance for your needs, you’ll first need to determine if you already have some coverage in place. For instance, you may have some form of disability income insurance through your employer. If you do, find out if you have short-term and/or long-term coverage, and exactly how long the benefits last. Knowing what coverage you already have will help you decide if you need additional coverage to help pay for your home or apartment, automobile(s), utilities, food, clothing, education, etc., should you become disabled.

If you’re self-employed, you need to carefully examine how a disabling injury or illness could affect you, your family, and your business. Workers compensation insurance is sometimes confused with disability income insurance, workers compensation (required of employers in most states) only covers disabilities that occur while you’re on the job. Hence, in order to qualify for benefits, the illness or injury must be work-related.

Since disability income insurance helps protect your potential future earnings, you should consider it an important part of your insurance program. Remember that individual contracts can be specifically tailored to help meet your personal and/or business needs. Because features and benefits vary widely from policy to policy, you may wish to discuss your needs with a qualified insurance professional—one who can answer your questions and concerns, assess your needs, and help you make an informed decision.