Protect Your Pay With Disability Income Insurance – May is Disability Insurance Awareness Month
According to the 2023 Insurance Barometer Study by Life Happens and LIMRA, 4 in 10 working-age people worry about their financial security if they can’t work. But only 18% have disability income insurance.
Choose the coverage that’s right for you
Disability income insurance, which comes in long-term and short-term forms, replaces a percentage of income when you can’t work. Short-term covers up to a year for illnesses, pregnancy or injuries, while long-term covers disabilities over six months, including cancer and major medical events.
Your choice of coverage depends on how long you can manage without income. A robust emergency fund might mean you can skip short-term coverage. Also, you should consider your family’s medical history and if you’re the family breadwinner.
About 40% of employers offer disability income insurance, covering 40%-50% of salary under certain conditions, but many employees don’t enroll. Private disability income insurance is available for those without employer coverage or needing more protection. This insurance is customizable and remains with you through job changes, with tax-free benefits, unlike employer-paid plans.
Know the benefits and limitations
Disability income insurance policies include a waiting, or elimination period, before payments begin. They consider other benefits like Social Security disability and define coverage duration and disability criteria. Policies may cover your current job for a limited time before requiring any job you’re qualified for.
Customize coverage with added features
Disability income insurance policies can include many extras, such as:
- Cost-of-living adjustments
- A guarantee that the policy won’t be canceled or renewed at higher rates
- An option that waives your policy premium once you’ve been disabled for a certain length of time
- A rider that allows you to work part time to reestablish yourself while still collecting adjusted benefit payments
- Coverage for a transitional period while you rebuild a business or professional practice
To learn more about a disability income insurance policy and why your income might be your most valuable asset visit: mutualofomaha.com/disability-insurance.