Disability Income Insurance for Exam: Protecting Your Income

Disability income insurance is a type of insurance that replaces a portion of your income if you become unable to work due to illness or injury.

This insurance can help you maintain your lifestyle and pay your bills even if you're unable to work.

According to the Social Security Administration, about one in four of today's 20-year-olds will become disabled before they reach retirement age.

A typical disability income insurance policy can replace up to 60% of your income.

Disability income insurance provides a source of replacement income when you're unable to work due to an illness or accident.

This type of insurance can offer a replacement income of up to $10,000 per month.

You can choose from short or long-term coverage, which can last from 2 years to age 65.

It's ideal for employees without group disability insurance through their employer, as well as self-employed workers and small business owners.

Individual insurance disability benefits are not taxable.

This coverage can also help with loan repayments and rent, if you're a tenant.

You should consider disability income insurance if you depend on your income to support your lifestyle and can't afford to be out of work for an extended period of time.

43% of all current 40-year-olds will have a disability event lasting 90 days or more by the time they're 65, so it's not just a risk, it's a reality.

If you don't have other sources of income available to fully cover your needs, disability income insurance can help provide a sense of security and replace a portion of your income after a covered disabling event.

A disabling event can strike at any time. In fact, 43% of all current 40-year-olds will have a disabling event lasting 90 days or more by the time they're 65.

The average length of a disability absence from work is approximately 3 years. This can have a significant impact on your finances and your way of life.

Disability can happen to anyone, regardless of age or health. It's not just a risk for older adults or those with pre-existing conditions.

Here are some startling statistics:

These statistics highlight the importance of having a plan in place to protect your income in the event of a disabling event.

43% of all current 40-year-olds will have a disability event lasting 90 days or more by the time they're 65. This means a significant portion of people will need disability income insurance to cover their expenses.

You should have enough disability income insurance to at least pay your monthly living expenses, so you and your family can focus on what's most important during such a critical time...your recovery.

Your salary determines the amount you are entitled to, with a general rule of thumb being that an annual salary of $50,000 makes you eligible for a maximum benefit of $3,000 per month.

A financial security advisor will be able to do a complete evaluation of your disability and income insurance needs.

Some providers offer simplified underwriting or simplified issue policies that don't require a medical exam.

You'll need to have a phone interview with the insurer, and only certain age groups are eligible.

These policies usually come with lower coverage limits, which may not be enough to cover your monthly expenses.

Rates won't necessarily be lower for a simplified-issue policy either.

43% of all current 40-year-olds will have a disability event lasting 90 days or more by the time they're 65. This risk is more common than you think.

If you depend on your income to support your lifestyle, you can't afford to be out of work for an extended period of time. Your expenses won't stop, but your income will.

A financial security advisor can help you determine the right amount of disability income insurance coverage for your needs. Generally speaking, your salary determines the amount you are entitled to.

You should have enough disability income insurance to at least pay your monthly living expenses. This will allow you to focus on your recovery during a critical time.

If you depend on your income to support your lifestyle, you can't afford to be out of work for an extended period of time. 43% of all current 40-year-olds will have a disability event lasting 90 days or more by the time they're 65.

Your employer's group insurance may only cover part of your full salary, leaving a significant gap in coverage. Individual disability and income insurance can supplement this coverage and protect your full salary amount.

Disability income insurance can replace a portion of your income and help provide a sense of security if the unexpected happens. It can provide a monthly benefit of up to 70% of your income after a covered disabling event, so you can focus more on your recovery and less on how you'll take care of expenses.

If you don't have other sources of income available to fully cover your needs, individual disability and income insurance can help offset the loss of your working income.

You should have enough disability income insurance to at least pay your monthly living expenses, so you and your family can focus on what's most important during such a critical time...your recovery.

If you depend on your income to support your lifestyle, you can't afford to be out of work for an extended period of time. Your income determines the amount you are entitled to, such as an annual salary of $50,000 making you eligible for a maximum benefit of $3,000 per month.

Disability income insurance can replace a portion of your income and help provide a sense of security if the unexpected happens. 43% of all current 40-year-olds will have a disability event lasting 90 days or more by the time they're 65.

You might want disability income insurance coverage to last for 6 months or to your retirement age, giving you the financial security you need to recover from a disabling event.

43% of all current 40-year-olds will have a disabling event lasting 90 days or more by the time they're 65. This is a sobering statistic that highlights the importance of having a plan in place.

The benefits of disability income insurance are numerous, including giving you access to a source of replacement income in case of disability, making sure you can continue to meet your financial commitments during your recovery, and helping to cover expenses related to your disability.

The amount of insurance benefits you'll receive is specified in your policy and will be confirmed based on your last two years' salary. For loan insurance, the benefits paid correspond to the total of your active eligible monthly loans at the time of onset of the disability.

You can receive benefits for a maximum of 60 months if you select a benefit period of two years, or until you reach age 65 if you select a benefit period until age 65. The waiting period specified in your contract must be completed before benefits begin.

Here's a summary of the benefit periods:

Disability income insurance can also provide benefits if you're working but have a disability that prevents you from performing some, but not all, of the essential duties of your occupation. You're eligible to receive a monthly benefit in this situation.