Did you know that you're more likely to become disabled for a period than to die? Your most significant asset is your ability to earn money, so you need to ask yourself some questions: If I become disabled, how would I cover my living expenses? How will I be able to save for retirement? And because an overwhelming majority of disabilities are health related, can I afford the risk of being without a paycheck and possibly having increased healthcare expenses?
Protecting your income by purchasing disability insurance is a fundamental risk management strategy for all wage earners whose income is required to maintain their lifestyles. The two primary types of disability insurance include
- Short- term: Coverage will provide income replacement protection, usually after one week of disability, and will pay for up to six months.
- Long-term: This type of disability insurance kicks in generally at the six-month mark and continues until age 65.
If you have disability insurance through your employer, you probably have only long-term disability coverage, and typically the coverage ranges between 60% and 70% of your current gross salary. So, if you’re struggling to get ahead on 100% of your salary, how do you think your finances will work on 60% to 70% of what you’re currently making?
