An introductory paragraph can be one of an essay’s most difficult parts. But it can also be one of the most important.
A disability insurance policy may cover up to 80% of your income if you are disabled from your occupation (known as own-occupation coverage). You can find a disability policy individually or through your employer.
You Have Big Plans for the Future
Whether saving for retirement, buying your dream home, or investing in your child’s college education, you work hard to secure the income you need to support your lifestyle and future goals. Your life would be significantly shortened if you wound up sick or injured and were unable to work.
A disability policy allows you to continue paying your mortgage, credit cards, car loans, and other expenses without missing payments. It also gives you the flexibility to pursue personal projects and goals you’ve put on hold while working.
Like with life insurance, your health dramatically impacts the price of a New York disability insurance policy. That’s why purchasing a policy as early as possible makes sense, especially for women who can take advantage of gender-neutral pricing.
You’re a High Earner
High-income earners, such as doctors, lawyers, or small business owners, need a disability insurance policy that protects most of their income. This is because, despite a hefty salary, these individuals still have financial obligations that consume 60%-70% of their gross income.
Many employees can access group disability insurance as part of their company benefits package. However, more is needed. Unlike an individual policy, this is because most group disability insurance plans have issues and participation limits that can leave a high-income earner grossly underinsured.
Additionally, most group policies have a limited definition of disability that only covers a portion of your wages. High-income professionals often need a long-term disability insurance plan that offers “own occupation” coverage, which pays if you cannot perform the tasks of your current position (but could do another job). This type of policy is typically available through a private broker or financial professional.
You Have a Spouse
Disability insurance is an essential financial safety net to protect your lifestyle, savings objectives, and investment plans if you cohabitate. If one partner gets disabled, the other may struggle to pay for essential expenses like healthcare, housing, and food. Unlike SSI, private disability policies typically don’t consider the spouse’s income for eligibility purposes.
While many adults are willing to risk the sustainability of their retirement portfolio without long-term disability insurance, that is a much harder risk for couples who have shared dependents, such as children or aging parents. In addition to providing partial income replacement benefits, disability income insurance can help you continue making alimony or child support payments if necessary after divorce. Moreover, quality policies with “true own occupation” definitions of disability can provide significant peace of mind and security for families who are both working professionals.
You’re a Health Care Professional
Many employers (and professional associations) offer disability insurance. If yours does, ask an independent agent to quote you a personal policy on the side and compare it with the group plan to ensure you understand the strengths and weaknesses.
An individual policy tends to have a more robust definition of disability than group policies, but it can cost more because there are no employer subsidies. Often, a good strategy is to purchase the personal policy early in your career. At the same time, you can still pass the underwriting process without a medical condition that would trigger a pre-existing condition clause. This way, the policy can follow you if you change jobs. A “own-occupancy” definition is generally preferred, but some companies offer an “any-occupation” definition.
You’re at Risk
If you have significant savings or derive most of your income from passive sources that wouldn’t be affected by a disability, you may not need disability insurance. But if your most valuable asset is your ability to make a living, you should consider protecting it.
A disability policy will supplement your income if you cannot work due to injury or illness so you can focus on healing and still pay the bills. Whether your income is the primary source of financial security, every working person should have this protection in place. Even if your job offers workers’ compensation, this coverage typically only replaces part of your salary and may only last for a short time.
