Disability Life Insurance - How Important Is It

We hear a lot about life insurance and the need to insure your life against an unexpected death, protecting your family from having to face a colossal financial loss which would affect their future.

But what if you did not die, but suffered an accident that left you either temporarily or permanently disabled? In fact, your chances of dying before the age of 65 are 4 times less than the chances of suffering a disability during your working career. It is just as important for you to have disability insurance as it is for you to have life insurance.

Depending on the severity of the injury, such a disability could keep you away from work for several months. Most employers may not be able to offer you any kind of compensation for the months you are away from work beyond a certain stipulated time period. And while you may have savings to cover for your loss of income, a disability can quickly eat into your life savings. How will your family survive? And what are the chances of this ever happening to you?

Let's consider the statistics.

Based on a disability risk calculator created by the Council for Disability Awareness (CDA), an average female, age 35, 5"4' in height, weighing 125 pounds, a non-smoker who works an office job with some outdoor responsibilities and leads a healthy lifestyle faces the following risks:

• 24 percent chance of becoming disabled for 90 days or longer during her career with a 38 percent chance that that disability would last 5 years or longer. The average disability for someone like her lasts 82 months.

Take an average male, age 35, 5"10', weighing 170 pounds, non-smoker working an office job with some outdoor responsibilities and leading a healthy lifestyle. The following risks would apply to him:

• 21 percent chance of becoming disabled for 3 months or longer during his working career with a 38 percent chance that that disability would last 5 years or longer. The average disability for someone like him would last 82 months.

According to the CDA, risks of disability are compounded with factors such as being overweight, the use of tobacco, engaging in high risk activities or behaviors, chronic health conditions such as; diabetes, high blood pressure, back pain, anxiety or depression, and frequent alcohol consumption or substance abuse.

Other statistics

• About 12 percent of the total American population is classified as disabled (over 36 million). More than 50 percent of those disabled are in their working years (18 to 64).
• One in four 20-year olds will become disabled before they retire.
• Disability can leave you without the ability to earn an income. According to the Commissioner's Disability Table, 80 percent of US workers will run out of their savings in just two months.

Where can you find help when you are temporarily disabled?

Social Security provides disability coverage depending on the extent of your disability. In order to qualify for Social Security Disability Insurance you have to have enough credits through social security taxes paid through either an employer or through self employment income tax. You should note that 80 percent of applicants for Social security disability coverage are refused coverage in their first attempt to file for benefits. It is extremely difficult to get social security disability coverage and many revert to hiring an attorney. If you have both social security and disability insurance, Social Security will not pay out until your disability life insurance coverage has maxed out

Worker's compensation will be effective only if your disability is work-related. Payments are usually low and insufficient to meet your needs. Besides, most employer-based life insurance disability coverage do not provide for long-term disability coverage.

So, if you think social security disability coverage or worker's compensation at your workplace would cover you, don't count on it. Perhaps you have health insurance? Health insurance will only pay for your medical bills. Only disability life insurance will compensate for the loss of income that occurs with a disability.

Purchasing Disability Life Insurance

Unlike life insurance, you can't purchase all the disability insurance coverage you think you need. At the most you can get a maximum 60 percent of your monthly income before taxes. This limit has been put in place so that people feel the need to come back into the workforce once they have fully recovered.

Purchasing an individual disability life insurance policy is the best way to make sure you are fully covered financially, should the need arise. There are various types of disability life insurance products and premiums will depend on:

• How hazardous your occupation is
• Your physical as well as your mental health
• The benefit period or the duration of your recuperation time. The longer the period the better for your recovery, but the longer a life insurance company has to shell out, the higher the periods.
• Elimination period which starts from the time you are injured to the time the company starts making payments to you. You chose this time period based on your own financial situation. In general, the longer the elimination period the cheaper the premiums.

Provisions that include partial disability, along with total disability, will cost more than a policy that just pays out for total disability.

Only disability life insurance will generate regular income for you while you recover from a disability. You won't have to worry about how you are going to manage your finances or support your family while you recuperate from your injuries. Purchasing disability insurance is not that difficult. Simply request for free disability life insurance quotes online.