Are you spending too much time worrying about things that may never happen and forgetting to plan for the future? If so, you might be underestimating your need for disability insurance. Not having this kind of coverage can leave you vulnerable to financial ruin in the case of a physical or mental injury. So if you’re ready to stop speculating and start protecting the future of your income, then it’s time to evaluate your need for disability insurance. After all, don’t wait until it’s too late to realize you should have insured yourself!
Research has shown that:
20-year-olds have a one in four chance of becoming disabled before they retire, and one in eight workers will be disabled for at least five years at some point during their life.
Out of the total American population (37 million), 12% are classified as disabled. Most disabilities (90%) come from illness rather than accidents, with group long-term disability claims averaging 34.6 months.
In fact, medical bills play a role in 62% of all bankruptcies filed each year across the United States.
Definition of disability insurance
Disability insurance is a form of protection that pays you a specified amount every month if you become unable to work due to illness or injury. The main purpose of this type of insurance is to protect your lifestyle and provide for yourself and your family in the event of an unforeseen disability. It works by providing a source of income should you ever become disabled, so you can still pay your bills and maintain the same standard of living as before the disability.
Overview of why people underestimate the importance and need for disability insurance
One of the main reasons people underestimate their need for disability insurance is that they simply do not understand the risks and consequences associated with a loss of income due to disability. It’s easy to think that such an event could never happen to you, but in reality, it’s much more common than most people realize. In fact, nearly 1 in 4 20-year-olds will experience a disability before they reach retirement age. And while a long-term disability can be financially devastating without proper protection, most people don’t plan ahead and fail to obtain adequate coverage.
Additionally, many people believe that their employer or the government will provide enough financial assistance should they become disabled. However, this isn’t always the case—in most circumstances, employer-provided disability insurance is only a fraction of your salary and can be terminated at any time. And while government benefits may provide some assistance, they are often not enough to cover all expenses associated with a disability.
Finally, many people are simply unaware of the different types of coverage available and how much it costs. Disability insurance policies vary greatly depending on factors such as type of job, health history, age, and income level. However, contrary to popular belief, these policies don’t have to break the bank—there are options that offer comprehensive protection at very reasonable rates.
Reasons Why People Underestimate Their Need for Disability Insurance
- Not understanding the risks associated with a disability: People often don’t consider the possibility that they could become disabled, and underestimate the financial devastation it can cause without proper protection.
- Thinking their employer or government will provide enough assistance: Many people believe that existing employer-provided plans or government benefits will be enough to support them in case of an illness or injury. This is often not true, as these programs only provide limited amounts of compensation.
- Unaware of different coverage options available: Disability insurance policies vary greatly depending on factors such as job type, health history, age, and income level—but there are still many affordable options out there for those who need them.
- Believing disability insurance is too expensive: While most people are aware that disability insurance exists, they don’t realize just how reasonably priced many plans can be. It’s important to do your research and shop around for the best option.
- Being under the impression that their existing health, car, or homeowners insurance will cover any lost wages due to a disability: Each of these plans only covers specific types of losses, and won’t compensate you for lost wages due to a disability.
Believing that Social Security will pick up all costs associated with a disability claim: Social Security may provide some assistance, but most likely not enough to cover all expenses associated with a disability.
The belief that they are invincible or won’t get sick/injured: No matter how healthy or young you are, there is no guarantee that you won’t become disabled at some point in your life. Disability insurance helps provide peace of mind by ensuring that if the unexpected does occur, you will have enough financial coverage to maintain the lifestyle you’ve become accustomed to.
Believing that Social Security will pick up all costs associated with a disability claim: Social Security may provide some assistance, but most likely not enough to cover all expenses associated with a disability.
The belief that they are invincible or won’t get sick/injured: No matter how healthy or young you are, there is no guarantee that you won’t become disabled at some point in your life. Disability insurance helps provide peace of mind by ensuring that if the unexpected does occur, you will have enough financial coverage to maintain the lifestyle you’ve become accustomed to.
How Much Does Disability Insurance Cost?
Disability insurance is a critical yet often overlooked financial planning tool. The cost of purchasing disability insurance depends on numerous factors, such as your age and occupation, as well as the type of coverage desired.
Although there will be a cost involved, the potential benefits far outweigh that outlay – if you suffer an injury or illness and can’t work to generate an income, disability insurance will provide financial protection that may help tide you over during difficult times. To ensure you are well-covered yet still within budget, it’s important to evaluate several disability insurance options and find one that meets your individual needs.
Factors that will determine the cost of disability insurance include:
- Age and occupation
- Benefit period
- Benefit amount
- Inflation protection
- Cost of living adjustment (COLA)
- Elimination period
It’s important to remember that the cost of disability insurance should be considered an investment in your financial security, so it’s worth taking some time to explore different options and find the best coverage for you. With careful planning, a well-chosen policy can help offer peace of mind in case of unforeseen events.
The benefits associated with buying disability insurance:
In case of an accident or illness, disability insurance can provide you with a steady income, allowing you to maintain your lifestyle and keep your financial plans intact. For many people, this security is invaluable.
How to find a plan that meets your budget and coverage needs
It’s important to shop around and compare different disability insurance plans. Each policy will have its own unique features and benefits that may fit your individual needs more or less than another option.
Consider factors such as age, occupation, benefit period, elimination period, and any rider options that may be available. When you find a plan you’re interested in, make sure to review it thoroughly. You should also look into the insurer’s financial rating before signing on the dotted line so that you can rest assured knowing you are covered by a reliable company.
Conclusion
In conclusion, disability insurance is an essential financial planning tool that can help protect your lifestyle and future in case of unexpected illness or injury. Taking the time to research and compare different options allows you to find a plan that meets both your budget and coverage needs. Understanding the value of having a plan in place for any potential disabilities or illnesses you may experience in life is invaluable, as it will give you peace of mind knowing that should something happen, you are financially prepared.
If you are looking for a reliable disability insurance policy that meets your needs, contact American Assurance USA today and get an obligation-free quote. Our friendly customer service staff will be more than happy to answer any questions about your coverage options and can help you find the perfect plan for your individual situation. With competitive rates and top-notch customer service, American Assurance USA is the perfect choice for protecting your financial future in case of unforeseen events. Call us today!
Disclaimer
This guide is for informational and educational purposes only, does not constitute financial advice, and should not be relied upon as such. Please consult a qualified financial advisor or tax professional for specific advice tailored to your situation. American Assurance USA does not accept any liability for loss arising from the use of this material. All information contained here was correct at the time of publishing.
