September 2021
Home Rates Location & Hours Contact Us

Brought to you by:

Do You Need Disability Insurance?
Why opting for disability insurance could be a lifesaver

You’re already paying for so many types of insurance coverage — including health, home, and automotive — you’re probably hesitant to pay for yet another type of insurance that you’re not obligated to have. But just because a certain insurance coverage isn’t required doesn’t mean it’s not a good idea to have.

Is disability insurance a crucial coverage for you, or is it an unnecessary precaution that will end up costing you more than it could ever deliver?

What is disability insurance?

Jason Fernando of Investopedia gives a clear definition of disability insurance. It’s “a type of insurance product that provides income in the event that a policyholder is prevented from working and earning an income due to a disability.”

He further explains that if a worker with an annual salary experienced an injury or illness that would disable them from continuing to work, “their disability insurance would compensate them for a portion of their lost income provided that they qualify. In this sense, disability insurance essentially covers the opportunity cost of the now-disabled worker.”

Types of disability insurance

There are two different types of disability insurance, as Susannah Snider explains in her article for U.S. News. Short-term disability insurance covers a predetermined portion of your salary for a few months. Long-term disability insurance “will partially replace lost income for longer durations in the event of an injury, illness or other malady that bars you from working.”

The source of insurance can also vary. All working Americans are eligible for Social Security disability insurance if they have a qualifying mental or physical impairment that prohibits them from working — but the criteria for being accepted are very strict.

Some employers provide their workers with insurance coverage through a workplace disability plan, but you likely don’t have the freedom to choose the terms or rates that would best apply to your personal situation. That’s why many people opt for private plans through third-party companies.

Barbara Marquand of Nerdwallet recommends signing up for employer-sponsored coverage at work if it’s offered. If it’s not, consider buying disability insurance through the workplace, a professional organization, or an individual plan.

Determining if you need insurance

If you can afford it, disability insurance is a risk worth taking because you’ll never know when you may need it. However, certain factors may increase the necessity that you opt for this coverage.

Rosenberg strongly recommends that “if you work in an injury-prone profession, you should definitely invest in disability insurance.” This applies to those performing manual labor or specialized roles that fundamentally rely on the use of a particular part of your body.

You should also strongly consider having disability insurance if you have a spouse, children, or other family members who directly depend on your regular income.

Could it happen to you?

Keep in mind that disability insurance isn’t just for sudden on-the-job accidents and resulting injuries; it’s also for internal health conditions like a heart attack, cancer, or a stroke — and those could happen to you even if you sit at an office desk every day.

Eric Rosenberg shares this data from the Council for Disability Awareness: “the most common causes of short-term disability claims are pregnancy, musculoskeletal disorders, digestive disorders, mental health issues, and injuries.”

Having a substantial emergency fund tucked away can be helpful for covering a couple of months of expenses if you lose your job or have a family emergency, but you shouldn’t drain your savings in the event of a lengthy illness or injury. Disability insurance helps support you during such situations, so investing in it can help keep you financially afloat during the roughest times in your life.

For your insurance needs, visit

Subscribe Privacy Policy Tell-A-Friend
August 2021
July 2021
June 2021

Published by IH Credit Union
Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.
Powered by IMN?