Even people who seem to have a solid grasp on the insurance market tend to have a difficult time explaining what exactly disability insurance is when pressed. Despite that, disability insurance is incredibly important and most American adults should know more about it. Let’s take a closer look at what exactly disability insurance is, and why it would behoove you to invest in a policy.
Disability insurance is not as complicated as it sounds. Essentially, a disability insurance policy protects your paycheck should you become unable to work. If you become ill or injured and unable to work for a while, disability insurance pays you a portion of your paycheck until you can return to work.
Protecting your paycheck seems like a no brainer, but a surprising number of people still refuse to invest in a policy. These are the three most common reasons we hear for refraining to invest in a policy, and why those reasons aren’t good enough!
I’m Young And Healthy, I’m Not Going To Get A Disability
While it can be helpful to have a positive mindset, it’s even more important not to have a delusional one. Not having a disability now in no way means that you won’t have one later. In fact, The Social Security Administration estimates that one in four 20-year-olds will become disabled and unable to work before the age of 67. Disability Insurance doesn’t just protect your paycheck now, it protects your future.
I Don’t Need It, Workers Comp Will Cover Me
Worker’s Comp only replaces loss of income if the injury occurs at the workplace or on the job, and, unfortunately, that is often not the case. In fact, most long-term disability cases are a result of an illness, not an accident. That means that if you’re relying on workers comp to protect your future, you are more than likely going to find yourself out of luck, and a paycheck.
I Have Long-Term Disability Insurance Through Work
Congratulations! You are one of the lucky few. However, long-term disability insurance through your employer often does not cover as much as people think it does. There are a few reasons for this. One, most long-term disability insurance is paid before tax. That means that your benefits are taxable, effectively lowering your total payout. Two, Long-term disability coverage tends to be more limited than a personal policy. And, finally, if you decide to change jobs you won’t be able to take your long-term disability coverage with you!
So yes, you do need disability insurance, but what kind you need depends on your personal situation. As with any insurance decision, be sure to consult with an insurance professional before signing anything. The staff at TGS Insurance are always happy to answer any questions you may have.