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Disability Insurance 101: The Basics

By |2018-06-28T22:54:10+00:00April 28, 2016|Disability Insurance, Social Security|
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One of the most important questions in life is ‘How long can you make it without a paycheck?’ What kind of situation would you be in if you suddenly couldn’t work? How would you pay your bills—your mortgage, car payment, or day-to-day food and clothing?

And that’s just the beginning. You’ll need to take into account not just bills, but most likely debt, living costs, and dependents. Not to mention, you will most likely be facing medical bills and expenses as a result of the injury.

Horrifyingly, most Americans wouldn’t even make it a month before having financial difficulties, and one in four Americans would have problems immediately.

There’s a 30% Chance It’ll Be You

According to a report by the Life and Health Insurance Foundation for Education entitled, “The Real Risk of Disability in the United States,” you actually have a 3-in-10 chance of suffering a disability that keeps you out of work for 90 days or longer at some point during your working career. And it’s not accidents that are the primary culprit. According to the Council for Disability Awareness, 90 percent of disabilities are caused by illnesses not accidents.

How serious is it? Consider: a 25-year old worker with an income of $50,000 who becomes too injured to be able to work again would lose $3.8 million dollars within their lifetime. In 2013, only 33% of applicants were approved for Social Security Disability.

What You Can’t Count On: Your Employer or the Government

Many workers incorrectly assume that either the government or their employer will provide disability insurance. California offers State Disability Insurance for most workers, but self-employed workers are not covered. And even though benefits are paid after seven days of disability, they’re only paid at 55%, and benefits end after one year.

The federal government provides a form of disability insurance through Social Security, but most would have to wait a year and a day to establish their disabled status and then expect some difficulty in becoming classified as disabled. Typically, it requires that you demonstrate that your medical condition prevents you from preforming any work at all, not just the job that you had held.

What You Can Count On: Disability Insurance

An individual disability insurance policy provides the most protection for you and your family, period. It provides peace of mind so that you know that you would be covered if you suddenly can’t work because of an illness or injury. You can even protect your own occupation and can include inflation protection in case your disability is long-term.

Premiums vary depending on things like the amount insured, the benefit period, and the waiting period or deductible. However, benefits can be tailor-made to fit your situation and your budget.

Let Us Help!

Since 1988, Susan Polk Insurance has been providing San Luis Obispo with expert disability insurance service. To find out more about getting a disability insurance policy, or for questions about your existing policy, contact us today and schedule a FREE consultation.

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