Most people know they need to insure their life, their car and their home or condo. But they often overlook insuring their most important asset – their ability to earn an income. Your income is the primary source of funding for a lifetime of things, from basic necessities to the hopes and dreams you have for yourself and those you love. Think about your income over an entire working life – a $75,000 annual income at age 30 today accumulates to $4,534,656 at age 65 (assuming 3% annual increases).
But what would happen if your income stopped because you were too sick or injured to work? Without a paycheck, how long could you pay your rent and utilities, buy groceries, make student loan payments, etc.? In all likelihood, your life would be thrown significantly off course.
Before you say this could never happen to you, consider the fact that one in four of today’s 20 year olds will become disabled before they retire.1 And if you’re thinking that most disabilities are the result of freak accidents, you’re in for a surprise. The vast majority of disabilities, about 90%, are caused by various forms of illness including cancer, mental disorders such as anxiety and depression, muscle and back problems, and heart disease.2
What to look for in a disability income policy
Disability income insurance (DI) can help replace your income if you become too sick or hurt to work. It provides a buffer against the unexpected. Should disability strike, DI provides income that can be used to keep your household running as well as to help you adjust to your changed circumstances.
But before you go shopping for a DI policy, you need to know what features to look for to get income protection you can count on:
How disability is defined
The definition of total disability outlines what constitutes being totally disabled.
- If a policy defines total disability as inability to return to work in any occupation, then it would typically pay benefits only if you were unable to perform any job, either your own or a job in a new field or occupation.
- If the policy defines total disability as an inability to work in your own occupation, it typically pays benefits if you cannot perform the duties of the occupation you were engaged in prior to becoming ill or injured.
Coverage for a partial disability and/or recovery
Flexibility to tailor coverage to your specific needs3
- Increase coverage as your income grows with no medical insurability requirement4
- Adjust benefits to help keep pace with the cost of living
- Safeguard retirement contributions
- Protect student loan payments
Portability
Most professionals expect to change jobs or employers multiple times during the course of their career.
- You can take individual DI coverage with you when you change jobs.
- Group long-term disability plans typically are not portable.
Cancellability
With group or association group coverage, you run the risk of being dropped and left unprotected at a time in your life when, due to your age or to a change in your health, it would be very difficult to qualify for coverage from another provider.
Timing
It’s important to note that the cost of individual disability income protection is based on age, so you can lock in a lower rate by buying now while you’re young and healthy.
You’ve made a significant investment of time and money to build your career with the promise of financial security and the other rewards your profession provides. But should you become too ill or injured to work, that promise evaporates. Contact Professional Insurance Programs to ensure you have adequate protection for your greatest asset. 800-637-4676 or [email protected].
1 U.S. Social Security Administration Fact Sheet, December 2018.
2 Council for Disability Awareness 2014 Long-Term Disability Claims Review.
3Product provisions and availability may vary by state. Optional riders are available for an additional premium.
4Restrictions and limitations apply. The amount of additional coverage available will be financially underwritten based on the amount of disability insurance you have or are eligible to receive, as well as your income at the time you apply.
