More than a quarter of Americans have some type of disability. A disability is defined by the Centers for Disease Control and Prevention as "any condition of the body or mind (impairment) that makes it difficult for the person with the condition to do certain activities (activity limitation) and interact with the world around them (participation restrictions)."
More than 25% of 20-year-olds can expect to lose at least a year's work from disabilities before they reach retirement. Illness, injury, or pregnancy will disable nearly 6% of working Americans for six months or less every year.
The average Social Security Disability Insurance benefit is $1,197 per month, or $14,364 per year. More than 51 million working adults do not have disability insurance beyond the Social Security's basic coverage.
Although many of us make sure to get adequate coverage of other types of insurance, disability insurance may be one of the most important. Consider the odds of having to use other types of insurance:
- Homeowners insurance: 1 in 88.
- Automobile insurance: 1 in 47.
- Long-term care insurance: 2 in 5.
The most common forms of disability coverage include:
- Short-term disability insurance.
- Long-term disability insurance.
- Business-overhead expense insurance.
- Business buyout insurance.
Disability insurance helps fill in the income gaps when you're unable to work. Long-term care insurance covers some or all caregiving costs from a disability.
Making the choice.
If you're thinking of getting disability insurance, here are some questions to consider:
How long do you expect to work? Are you close to retirement, or are you just starting out in your career? Are you your family's provider?
Does your employer offer disability insurance? When does the policy become effective? When are premiums paid, before taxes or after taxes? Is the insurance portable? Can you take it with you to another job?
How does your policy define disability? Some define disability in different ways, such as a complete inability to work or an inability to perform your specific job duties.
If you have any questions about disability income insurance or would like help reviewing your existing coverage, give us a call. We're happy to talk.
These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
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