Do I need Disability Insurance?

Overview of Disability Insurance

Disability Insurance is a type of insurance that is most often neglected. It basically insures your income generating ability. People build up their assets over time in a process of converting their intangible asset - namely their earning ability - into tangible ones. Disability Insurance ensures that you protect yourself and are able to generate a continuous revenue flow.

Special needs for Disability Insurance

While most couples can get by for a short while on each others income, the situation becomes untenable if you're single. To complicate matters, you might be bringing up a child or children by yourself. What will happen to them if you are suddenly unable to work? Even being unemployed for a few months can throw you into huge amounts of debt. Is that really a risk you would like to take?

Data garnered over the years has shown that an average person has a 30% chance of being disabled at some point in his or her life. That's quite a large number. While medical insurance can pay off most of your direct hospital bills, it won't pay the mortgage and other utility bills that will continue to arrive with clockwork precision even when you're off work. Disability Insurance keeps you afloat during this dangerous period.

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Benefits of Disability Insurance

Disability Insurance is designed to ensure that most of your income is replaced when you're unable to work. Around 70% of your regular income can be obtained via the benefits. For most people, their savings make up for the rest.

Different plans provide you with different periods of coverage. Short term Disability Insurance can cover you for as little as a few weeks (upto 2 years) and long term coverage can extend right upto the age of 65. Of course, long term coverage costs more. In addition, if you purchased disability insurance on your own, then the benefits are tax free (If you purchased coverage after paying tax).

Obtaining Disability Insurance

Most people can get disability insurance from their employers. In some states, it is mandatory for your employer to provide you with disability insurance. You can also be covered through workers compensation which covers you only for work related injuries though. Social Security provides some cover as well, but it's not easy to get and the payments are meager. Buying disability insurance yourself adds to these benefits and provides you with even more cushion.

Summary

Disability Insurance is an important part of one's total safety net. Be sure to protect your most valuable asset - and often the only thing that really matters. Shop around in our site and compare the various deals for a side by side overview. We hope you find the best possible deals