Disability Income Insurance FAQ's

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What Is Disability Insurance?

Disability insurance is also known as "Income Replacement" insurance. If you cannot work because of illness or severe injury, this replaces your lost wages.

Can't I get money from Social Security if I become disabled?

In general, Social Security pays benefits only if you have been out of work at least a year. You must have a certain number of work credits to qualify. You will not qualify for benefits if you are only partially or temporarily disabled.

Why do I need Disability Insurance?

If you have a job and are supporting yourself, consider what will happen if you become disabled. Where would you live? Who would support you? Long term disablity insurance is a vital part of your personal financial security.

If other people like your spouse, your children, or your parents are depending upon you as a breadwinner, then your disability can affect their lives in many tragic ways. Your children may have to give up their dreams of completing high school or college; your spouse may have to work full-time even though you'll need care at home. Many families have had to sell their homes or declare bankruptcy after a breadwinner becomes disabled.

What are the chances that I become disabled?

According to the U.S. Social Security Administration, a worker, at age 20, has a 3 in 10 chance of becoming disabled before reaching retirement age.

What are the kinds of Disability Insurance?

Nearly all policies replace your 45% to 60% of your income tax-free. Obviously, people who are earning more money will need more coverage to replace their incomes.

Some policies will pay benefits even if the policy holder is able to work part-time or in a lesser capacity. Most policies pay for short term disability. For instance, if you are in a car accident and need to miss work because you need physical therapy or rehabilitation, your policy will replace your income during that period. Remember that the federal government will not pay for partial or short term disability losses.

Many policies have a "waiting period" before benefits will be paid. The longer the waiting period, the more money you save on premiums.

*Souce: www.ssa.gov