As per the CDC, 61 million American adults live with some form of disability. With such a large portion of the American population living with a disability, disability insurance can be a life-changing asset for millions. For those who are not sure what disability insurance is, it’s a form of insurance that pays you a part of your income if a disease or injury prevents you from working and earning a living. Stops
There are 2 types of disability insurance: long-term disability insurance, which typically pays a portion of your lost earnings from 1 year to your entire working life, and other is short-term disability insurance, which replaces a percentage of your lost income. For a short time — usually between three and six months.
Disability insurance is one of the most misunderstood types of insurance. Many people believe that it is irrelevant to them. Still, according to the 2022 Insurance Barometer Study, half of Americans (49%) say their family will face financial hardship in six months or less if their primary wage earner becomes ill or injured. Will have to do that.
Here we’ll discuss some of the biggest misconceptions about disability insurance and why it might be worth looking into for yourself or a loved one.
I can not get disability insurance if I don’t work full-time.
Many people believe you must work full-time to qualify for disability insurance, which is not true. As long as you meet the eligibility requirements for disability insurance and can prove that you are losing wages, you would otherwise be able to earn and may qualify for disability insurance. It’s important to properly assess your situation to determine if disability insurance is right for you, regardless of your employment status. To estimate how much coverage you’ll need to maintain your current standard of living, visit the Life Happens Disability Insurance Needs Calculator.
If I’m healthy, I don’t need disability insurance.
Even if you’re still in good health, don’t write disability insurance. If you depend on a paycheck to provide for yourself, it’s worth looking into disability insurance. What many people need to realize is that there is always the possibility that you could become ill or injured and unable to work in the future. 1 in 4 workers in the workforce today will develop a disability before they retire. Disability can happen to any person at any time. Disability insurance can help if something prevents or ends your ability to work and earn a living.
Disability insurance is very expensive.
The cost of disability insurance typically ranges from 1% to 3% of your annual salary and depends on several factors, including age, gender, current health status, and occupation. For example, the younger you are, the healthier you are. Disability insurance rates will likely reflect this. If your occupation requires heavy manual labor, handling dangerous equipment, or hazardous conditions, disability insurance rates are higher.
Other factors will affect the cost of disability insurance, such as benefit duration and amount, termination period, and more. It’s important to explore all premium options when looking for disability insurance because the cost will depend on your specific situation.