Disability Insurance is a type of insurance that pay the cost to beneficiary whose
income is lost when an individual is unable to work as the result of an illness or an accident, and pay the beneficiary the cost for short-term disability benefits,or long-term
disability benefits.
Most people have life insurance and health insurance. Why? Because they realize the cost of funeral expenses, the survivor 's living expense, and medical bills could
overwhelm them and their family. If you rely on your income to pay the bills. If the answer is yes, you need Disability insurance.
But many people think disabilities won’t happen to them, the statistics show that this isn’t true.
please see the chart below.
| Age | Percentage | Disabled |
| 25 | 52% | 1 out of 2 |
| 30 | 51% | 1 out of 2 |
| 35 | 46% | 4 out of 9 |
| 40 | 45% | 4 out of 9 |
| 45 | 40% | 2 out of 5 |
| 50 | 34% | 1 out of 3 |
| 55 | 16% | 1 out of 6 |
People often incorrectly believe they will be covered by Social Security, Workers’ Compensation, or their own savings. This simply isn’t true most of the time
either.
Although these programs and savings can certainly help to supplement income, your can’t expect they will be able to recoup your income using these sources.Social
Security benefits are often difficult to obtain,since the restrictions state clients must be completely disabled with no hope of recovery for a period of at least one year, or have a disability
expected to be fatal.
Workers’ Compensation offers limited benefits, but only if you is injured while on the job. The last resort, personal savings, is often a risky place for you to
place their faith. A short disability is likely to wipe out any savings, even if they are substantial. When no income is being generated, money for the mortgage, utilities, car payments, and
other large expenses may consume your savings.
How much does disability insurance cost?
Remember your ability to work is one of the most valuable assets you have. There are many factors to count . Disability insurance is priced according to the
elimination period, benefit period, age, occupational class, and benefit amount. It can be customized to you want and need. It would be safe to say that you will pay between 1-3% of your annual
income for a quality DI plan, so leaving it unprotected can often be a foolish choice.
The financial impact of a disability
This can be measured as a combination of lost income and increased expense, the additional costs incurred as a result of a disability.
• Healthcare: Medical insurance premiums and out-of-pocket costs for health services,
as well as non-insured expenses, such as medical supplies, rehabilitation programs,
vocational retraining, etc.
• Pension: Employee contributions to retirement savings accounts.
• Home costs: Mortgage payments, rent, property taxes, utilities, maintenance, and furnishings.
• Discretionary expenses: Dining out, entertainment, alcohol and tobacco, gifts, charitable
contributions, etc.
• Other expenses: Expenses not classified elsewhere and that cannot be easily reduced,
such as food and clothing.
The Non-financial Impact of Disability
• Obstacles to Returning to Work
• Impact on Mental Health
• Stress on Family Caregivers
• Risk of Divorce
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Sources of Disability Income
1. Through government-sponsored insurance program
Workers’ Compensation
Social Security Disability
2. Through private insurance programs
Group Long-term Disability
Individual Disability
