Is disability insurance worth it? Everything You Need to Know

If you’ve ever thought of what would happen to you if you’re no longer able to fend for yourself or your family due to a physical challenge, you’ve definitely asked – is disability insurance worth it?

As hard as it might be to answer, the question (is disability insurance worth it) is pertinent, and everyone who goes out all day pounding the basement, to get the Check home should think about it.

Look at it this way…

You’ve gone through all the rigorous training and re-trainings, kept late nights to meet deadlines, and sometimes had to leave your family for weeks all for this job.

However, are the checks enough insurance to fall back on if say you’re no longer able to do these things?

Let’s face it, sometimes really bad things happen to even good people. In such times, your check may not really matter anymore, because they will stop coming.

But an insurance check would definitely slap in such a case!! Nonetheless, you can’t get the check if you don’t buy a policy.

Therefore, on this post is disability insurance worth it, we’d be discussing the importance of getting disability insurance. We’d also look at some of the cons to help you make the best decision.

Meanwhile, here’s a table of content that outlines what you should expect in this post.

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What Is Disability Insurance?

Disability insurance, in general, pays a portion of your income if something happens to you (such as a sickness or injury) and you are unable to work.

It is easier to qualify for a policy if you are younger and healthier. Premiums, on the other hand, rise as you become older. And if your health deteriorates, you may struggle to get a cheap policy at all.

On the other hand, It does not only cover odd incidents. The majority of claims are for things you might not recognize are disabilities, such as physical injuries, a heart attack, or cancer.

This may happen to anyone, at any time, in any workplace. And given other conditions like old age and ill health, that makes the policy a bit expensive, getting your disability insurance right now is definitely worth it!!

Why You Should Buy Disability Inusurance?

According to the Social Security Administration (SSA), one out of every four 20-year-olds will be disabled for 90 days or more before they age 67, while 68 percent of non-government workers do not receive disability insurance.

So, if you’re still asking if disability insurance is worth it, you got your answer. If you believe none of these things will happen to you? Reconsider your position.

Remember, getting the insurance isn’t just for you, but also for those who rely on your income.

Therefore, you should have a long-term strategy – beyond a 3-6 month emergency fund – which is critical. What a relief it would be to know that money was still rolling in while you were recovering.

What Kinds of Disability Insurance Are There?

Short-term and long-term disability insurance are the two sorts of disability insurance that you’ll see a lot of these days.

In terms of how they replace a portion of your monthly salary, they are essentially the same. But that’s something we’ll talk about later.

Even though they do the same thing, there are key distinctions between short-term and long-term disability insurance that you should be aware of. Here’s how they compare:

	Short-Term Insurance	Long-Term Insurance
How much does it cover?	Around 60–70% of your salary	40–60% of your salary (but we recommend finding a policy that covers 60–70%)
How long does it last?	Usually 3-6 months —but that depends on the policy	Five years or longer if your disability continues
How much does it cost?	1–3% of your yearly income (but tends to be more expensive than long-term coverage)	1–3% percent of your yearly income
How soon would you get your first payout?	Around two weeks from when the doctor confirms you have a disability	Usually around 3-6 months
Why would you get it?	Only if your employer offers it at no cost to you	If you rely on your income and you don’t have savings to replace it long term

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Long-Term Disability Insurance

Long-term disability insurance isn’t the only disability insurance worth buying. If you have what it takes, buy the insurance that would last way into your retirement.

For clarity, Long-term insurance plans are those plans that could last for two years or more.

While such plans are better if bought as an individual, it’s way cheaper if you let your employer buy for you. However, buying for yourself gives you the latitude to transfer such plans into your next job if need be.

While long-term disability insurance plans seem like your best option, it has their cons. This includes the time it takes to process your check even after your doctor has confirmed you are disabled or unfit for work.

Short-Term Disability Plan

Like its name short-term disability insurance plans, it is short. This means that you can start getting your check as fast as possible (average weeks).

What this also means is that the payout lasts for only a few months into a year. This said the cost of long-term and short-term premiums for disabilities policies are typically the same. However, short-term premiums are usually more expensive in some cases.

My advice? Don’t let your employer get the short-term policy for you. You can actually have the said amount tucked away in some emergency fund.

This way, you don’t have to wait for it to be paid out, because it’s yours and this makes the short-term disability insurance total worth it.

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What Does It Cost To Get Disability Inasurance

The cost of disability insurance (also known as premiums) for both short- and long-term coverage can range from 1% to 3% of your annual income. If you earn $50,000 per year, that equates to $60 to $125 every month.

However, if you purchase long-term coverage with a longer elimination period, you will pay less. If you can, buy a “non-cancellable insurance policy,” which means the insurance provider can’t terminate it even if your health changes.

Your age, whether you smoke, what you do for a livelihood, and how much money you make all have an impact on how much you pay in premiums each month. (Because protecting your earnings will cost you more if you make a lot.)

And, because insurance companies aren’t known for making things simple, their definition of disability has an impact on the cost of disability insurance.

Who Should Get Disability Insurance

Everyone!! Except for Elon maybe. The thing is that where or whatever kind of job you find yourself in, you need the disability plan just like the guy next door.

While employees not handling heavy machines may not be susceptible to an injury that would put them out of work for a while, it’s advised that they too get a disability insurance policy.

No one really knows what might put you out of work, it might not necessarily arise from your responsibilities at work.

And if you’re planning on getting a disability insurance plan, forgo the short-term insurance plan for the long-term disability insurance plan.

Note: The kind of job you do might influence the cost of your disability insurance plan. For employees that their jobs require lots of risks every day, they might be charged slightly above an employee who seats behind a desk all day.

However, do not worry if you’re such an employee as most employers provide disability insurance plans for such employees with high-risk jobs.

What Your Disability Insurance Might Not Cover

Disability insurance is only intended to restore a portion of your income; it does not cover additional costs such as medical bills or long-term care.

While pregnancy isn’t normally covered by long-term insurance, difficulties that occur after the baby is born (for example, if a doctor orders you to stay at home following a C-section) may qualify you for benefits—but only if you had a long-term policy in place before you became pregnant.

Birth as a disability is covered by short-term insurance, but you may have to wait six to eight weeks for each check.

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