In Case of Emergency

Three in 10 people will need it, but many won’t have it. Do you?

  • By Jocelyn Black Hodes, DailyWorth's Resident Financial Advisor
  • July 11, 2013

It may have seemed a silly expense at the time--after all, she had yet to hit 30 and was the picture of health. But thanks to her disability insurance, Meredith was able to cover 60 percent of her income while she was out of work and receive a partial disability benefit to supplement her income when she returned to work part-time. 

Told she would be lucky to live for one year, Meredith has now been cancer-free for more than eight. She even returned to competing in triathlons. Her experience also inspired her to build a successful wealth management practice focused around protection. “Your ability to earn income is your greatest asset,” she says. “Insuring it must be a top priority.” 

Most of us have heard of disability insurance. But we don’t think about it, or don’t want to think about it, until we need it. And that happens more often than you might imagine. According to the Life and Health Insurance Foundation for Education (LIFE), three in ten workers will suffer a disability lasting three months or longer at some time in their career--and 90 percent of disabilities occur outside of work (so they’re not covered by Workers’ Compensation). 

Those are some scary statistics. If you’re working full-time, it’s not hard to imagine the impact losing a paycheck for even three months could have on your life and your family (if you have one). Couple that with the treatment and rehabilitation costs that may not be covered by insurance, and you have the makings of a full-blown financial crisis. 

In some cases, you can apply for Social Security disability benefits, but many people are turned down because of the strict criteria. Social Security disability benefits are not available, for example, if you’re expected to be out of work for less than a year. (You can read more about the application process and qualifications for receiving benefits here.)

Go to page 3 for answers to the most frequent questions I got about disability insurance.

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