Disability Insurance

Unfortunately, risk of disability is one of the biggest financial risks we all face. There is a 20% chance that you will experience a period of disability in your career.

Disability insurance is protection for one of your most valuable assets – your ability to earn an income. If you can’t earn income for a while due to illness or injury, disability insurance replaces a portion of your paycheck.

Disability insurance is a great option for almost anyone who earns a paycheck. If you and your dependents, like a spouse or children, rely on your paycheck to pay monthly bills and make progress towards financial goals, disability insurance is a smart choice.

Disability insurance typically covers you regardless of whether an accident or illness is work related. If you are a service provider (firefighter; police and in some cases skilled trades) your coverage will vary based on whether or not the accident occurred during work. Be careful and review plans such as workers compensation or accidental death and dismemberment. These policies may be specific to work related injuries and only for a limited period of time.

To receive disability benefits, your illness or injury has to be included in the policy’s definition of disability. Two common definitions of disability are own occupation and any occupation. These are important definitions that impact the coverage and related payments. A good rule of thumb is to have disability coverage that replaces 60-70% of your annual income.

Action: Review the disability policy you are currently under. If you don’t have disability, is that a decision you made with your “eyes wide open”?