Why Would You Need Individual Disability Insurance?
Individual Disability Insurance
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Why would anyone need individual disability insurance policy? Doesn't an employee-sponsored group insurance plan take care of everything if you ever become disabled? Not necessarily. First consider the necessity of disability insurance. One in three working Americans will be injured or become ill for a period of 90 days or longer, according to a study highlighted in National Underwriter Magazine. Since the average disability period is about two and a half years, this is a significant amount of income that would be lost.
Limitations Of Group Disability Insurance
But if you have a good job, then wouldn't an individual disability insurance be meaningless? No, because there are many limitations and exclusions you will have to deal with if you use a group insurance policy. For example, if you're counting on social security disability payments, know that you have to qualify to receive that money, and most qualifying disabilities must put you out of work for over a year.
You may have workers' compensation insurance but that policy will only pay off if you are injured on the job—and it's usually only about 50% of your regular income. These payments are not only taxable, but coverage usually includes a maximum monthly cap that will drastically affect the total amount disability income you receive.
How Individual Disability Insurance Can Help
Individual disability insurance can help provide regular income in the event of an unexpected disability situation. A good policy can replace up to 60% of your usual monthly income. How is that better than workers compensation? It's comparable, not necessarily better. In fact, you want to receive as much money as possible when you're out of work. Therefore, you could benefit from both workers compensation if you were injured on the job as well as an individual disability insurance policy.
However, there may be some circumstances in which a group insurance plan cannot help you. You may become injured off the job, or develop a serious illness for an unknown reason. Workers compensation or social security disability might not be able to cover events such as this—meaning you will basically be out of a job anywhere from two months to two years!
Find Disability Insurance You Can Count On
Individual disability insurance can make sure you're left with something, even if you can't work for a long period of time. With half of your usual paycheck, even if you're self employed, you can continue to pay your most important bills—rent, utility, insurance, cars, etc—and cut costs to make up for the lost portion. This is a shrewd move, especially if you have future financial plans such as college, retirement or even a vacation.
Search for the best disability insurance coverage on line. You can get a free price quote custom made to your location and desired plan coverage. That saves you the time of searching blindly by insurance company name. Individual disability insurance may cost you, but living without disability insurance and leaving your finances up to luck is far too expensive.
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