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What is Disability Insurance and Why Should I Have It?

March 08, 2021
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While most people think of health insurance and life insurance when they consider protecting their assets, disability insurance is something that should not be overlooked in a comprehensive financial plan. Though your home and retirement savings are large assets, your biggest asset is your ability to get up and go to work each day—and if that is suddenly removed, having protection to fall back on is key.

Disabilities can arise due to a variety of scenarios—whether you’re injured in a car wreck, experience something that prevents you from working within your specialty, or are diagnosed with a serious medical condition, knowing that you have the proper amount of coverage can make all the difference in your peace of mind.

Some statistics about loss of cash flow: One in four Americans will experience a long-term disability before they reach the age of 65. Nine in 10 of those cases are health-related, and only one in 10 is injury-related. The average length of a long-term disability is 2.5 years. Could you last that long on savings?

What is Disability Insurance?

If you are the primary provider for your household, losing your steady income can be devastating—in fact, foreclosures occur due to disability 16 times as often as they do for death. If you become ill or are injured in an accident, disability insurance provides you with a steady source of income for the time period you are unable to work. 

It is smart to consider both short-term and long-term disability insurance so you can have confidence that you’re covered in a variety of scenarios. Short-term disability insurance can be used for smaller injuries, health disorders, and mental health issues, and typically coverage will kick in right away. Long-term disability typically takes about 6 months to kick in and will often be used for scenarios such as cancer and other serious health conditions that require long-term treatment.

Why Should I Have Disability Insurance?

Studies show that more than one and four workers will experience a disability for 90 days or more before they retire—and if you work in a job that requires manual labor, site visits, or other scenarios with an increased risk of injury, your chances can be even higher. The situations can lead to a need for disability insurance can be as serious as a terminal illness, but also as commonplace as back injuries or heart attack complications. This can be particularly devastating if you are the primary income earner for your household.

Consider what your life would look like without your income. How much money would your household receive each month? How many of your bills would still need to be paid on time? Could you handle these financial commitments with the addition of medical bills? If the answers to these questions give you pause, it is wise to look into investing into a short- and long-term disability insurance policy for your financial security and your peace of mind.


Would you like to learn more about disability insurance and how to protect your income? Contact us today. We can help you build and protect a solid financial portfolio that’s unique to your situation.