Disability Insurance

Disability insurance is defined over the Internet as, “A form of insurance coverage that provides a portion of income lost as the result of a total or partial disability caused by either an accident or an illness.” It is also defined as, “An insurance policy designed to pay a specified monthly income to the policyholder in the event that he/she becomes either temporarily or permanently incapable of working.” Disability insurance is also referred to as “Accident and Sickness Protection” and sometimes, “Accident and Health Protection.” The express purpose of disability insurance is to protect a person from the income they will lose if they get hurt or fall victim to an injury.

Many people discount disability insurance because they think that they do not need to worry about becoming disabled because they do not work in a dangerous type of job. This is not a wise way to look at the situation. Disability insurance covers a variety of different injuries and sicknesses and you do not have to become injured at work to need disability insurance.

Let’s look at some statistics compiled by the Commissioners Individual Disability in 1985 regarding a person’s chances of developing any kind of a disability before reaching the age of 65. These statistics looked at disabilities that made it impossible for the person in question to work at their job for a period of three months or more. According to these statistics, the risk of disability is highest for younger people in their twenties and gradually decreases with age. At the age of 25 there is a 58 percent of becoming disabled; at age 30 the percentage drops to 54; and by age 35 there is a 50 percent chance of being befallen by a disability. At the age of 40 the risk of disability drops to 48 percent and by age 45 it is 40 percent. By age 50 the chance of a disability is 30 percent and finally the last statistic concerns age 55 and states that by that age a person has a 23 percent chance of becoming disabled.

Why is it important to consider getting personal disability insurance for yourself? Be aware that Worker’s Compensation will only cover accidents or injuries that take place while you are on the job and it may not cover you for as long a period of time as you need to be covered for. Unemployment insurance can help somewhat if you cannot work due to an injury or disability but the process for applying for it can be time consuming and laborious and you may only be covered for a shorter period of time then you actually require to get better. If you have a group health plan through your workplace or coverage by way of an association this is good because it can provide benefits when it comes to disability protection in the long term but be aware that the benefits may be limited in the coverage they allow you as well as by the kind of disability you have suffered. It is always good to know how you are protected under your group plan in the event that you were to become disabled. Purchasing disability insurance though is the best route to take.