Most people don't think about it, but your most important asset is your ability to earn a living. If you suddenly lost the ability to work, how would that affect your retirement, plans to own a home, putting your kids through college, or even your ability to pay the monthly bills? Disability insurance protects your ability to earn a living. If you are unable to work because of illness or injury, disability insurance provides an income to you; typically 60% of your monthly income.
Who Needs It?
If you have a job, odds are you need disability insurance. Most people have personal debt, from mortgages to credit card bills, and being unable to work for an extended period of time could substantially impact your ability to keep up with monthly bills. Another thing to keep in mind is the fact that if you are disabled, there will most likely be medical bills to pay as well as your everyday costs to keep your house or family running.
Where do I Buy It?
There are different ways to get disability insurance: through your employer, through a professional organization, or purchasing it on your own. Many employers offer a combination of short- and long-term disability insurance. One benefit of employer-provided disability coverage is you don't have to go through underwriting in order to get coverage.
Many professional organizations offer disability insurance coverage to their members for a lower price than what you would get if you purchased it alone. For these plans there is typically little underwriting and the price is primarily based on your age and income.
Purchasing disability insurance on your own is beneficial because you don't have to worry about losing your coverage if you change jobs. Purchasing disability insurance individually also offers you the ability to shop multiple carriers to get the best rate.
It is important to look at your budget, health status, and the benefits you want to determine which way would be best for you.