What Is Disability Insurance?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

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A disability insurance policy protects against one of the greatest threats to your household income: becoming unable to work due to an injury or disability. If you are physically unable to work, your income has been cut significantly while your expenses remain the same. The purpose of disability insurance is to provide income to pay the expense of life even though you can’t work due to a disability. A disability insurance policy is a key part of your insurance portfolio!

TIP: The risk of not investing in a disability insurance policy is considerable. You could find yourself out of work with mounting bills that you cannot pay for.

Risks Covered by Disability Insurance Policies

Disability insurance policies protect your greatest financial asset: the ability to earn a living. A disabling illness or injury can stop income, impose additional costs, and prevent saving for the future. Disabilities are not a rarity: statistics from the National Association of Insurance Commissioners show that a 35-year old has a 25% of incurring at least one period of disability of 90 days or longer during his or her working years. Studies further show:

  • Over 36 million Americans are classified as disabled; about 12% of the total population
  • More than 50% of those disabled Americans are in their working years, from 18-64.
  • 8.3 million disabled wage earners, over 5% of U.S. workers, were receiving Social Security Disability (SSDI) benefits at the conclusion of March, 2011.
  • In December of 2010, there were over 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits.

The risk of disability is real. Despite the risk, many people do not have an adequate individual disability policy to protect them if they lose their primary income due to a disability. Underestimating your real risk of disability can be financially devastating! Disability insurance policies are worth the investment!

Disability Insurance Coverage Misconception

A disability insurance policy covers a range of disabilities or injuries. When most people think of disability insurance, their minds immediately go to work injuries and workers compensation. Although workers compensation benefits are available to most people, those benefits are only available if you are disabled because of a work-related injury or illness, and most disabling injuries and illnesses are not work related. According to findings by a leading disability research and consulting firm, 90 percent of disabilities are the result of illness. In addition to illnesses, your disability insurance policy covers you in the event of:

  • A car accident leaving you temporarily or permanently disabled
  • A weekend sports injury, causing paralysis or other disabling injury
  • Blindness due to disease or accident related injury
  • Any number of chronic or sudden illnesses, cancer, hepatitis, AIDS/HIV, MS, stroke, or the like, leaving someone unable to work.

Disability insurance covers the illnesses or injuries that occur outside the workplace, and provide you with protection that workers compensation can’t. Of course, disability insurance policies will cover work place injuries as well, which means you get an all encompassing level of coverage when you purchase disability insurance.

Why You Need an Individual Disability Insurance Plan

Most people do not consider purchasing an individual disability policy because they feel they can rely on disability insurance help from public or workplace safety net programs and social security. These programs are at best limited and far too often non-existent. For example, the Social Security Disability Insurance Program will cover you, but SSDI’s strict disability definition makes it difficult to qualify. Even for those who do qualify, the SSDI does not pay enough to maintain an adequate standard of living.

Public disability insurance policies do not provide reliable or adequate coverage to maintain your particular standard of living! Your individual disability insurance coverage will be tailored to your income and lifestyle, and provide you with the insurance that you need should you become unable to work. Do not relay on public disability insurance!

The Purpose of Disability Insurance

The purpose of any disability insurance policy is to protect your income and your lifestyle in the event you can’t work. You can do this by tailoring an individual disability insurance policy to your needs. Calculate your monthly income and your expenses and build a disability insurance policy that will give you the weekly or monthly payments you need to pay your mortgage, groceries, utilities, and other bills. When you buy a policy, take the time to find the right disability insurance for your needs.

Get a Disability Insurance Policy Quote Today!

Your income actually serves two priorities –providing today’s basic necessities and building a foundation for tomorrow’s financial stability. A disability insurance policy protects you when you can no longer earn an income, and is a critical part of your insurance portfolio. Getting a quote on disability insurance is a great first step towards making sure your income is protected. By comparing disability insurance quotes you can find the right policy for an affordable price. When you are ready to purchase a disability insurance policy, click here and get a free quote on an individual disability insurance plan today!

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