Your most valuable asset isn’t your house, car or retirement account. It’s the ability to make a living. Disability insurance is a form of insurance that provides protection on the beneficiary’s income against the risk that a disability creates a barrier for a worker to compete the core functions of their work.

How to get disability insurance

  1. You can sign up for employer-sponsored coverage at work. Most employers that offer disability insurance pay some or all of the cost of premiums. Five states provide or require employers to provide short-term disability benefits: California, Hawaii, New Jersey, New York and Rhode Island.
  2. You can buy disability insurance through the workplace or a professional association. Some employers may not pay for disability insurance but offer it as a voluntary benefit. Some groups offer their members coverage at group rates.


Types of disability insurance

There are two main types of disability insurance — short-term and long-term coverage. Both replace a portion of your monthly base salary up to a cap. Some long-term policies pay for additional services, such as training to return to the workforce.

Disability policies vary in how they define “disabled.” Some policies pay out only if you can’t work any job for which you’re qualified. Others pay out if you can’t perform a job in your occupation. Some policies cover partial disability, which means they pay a portion of the benefit if you can work part time. Others pay only if you can’t work at all.

The annual price for a long-term disability insurance policy generally ranges from 1% to 3% of your annual income, according to the Council for Disability Awareness. A variety of factors affect the cost: your age and health, your gender, whether you smoke, your occupation, your income, length of benefits, and extra features

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