If you are disabled or unable to work as a result of an accident or illness, disability income insurance, which complements health insurance, can replace lost income. There are basically three ways to replace income:
1. Employer-paid disability insurance
2. Social Security disability benefits
3. Individual disability income insurance policies
Most employers offer some kind of disability insurance, but you should find out exactly what your employer offers before you have to file a claim. Most allow some short-term sick leave, which might last from a few days to as much as six months. Five states and Puerto Rico have Temporary Disability Insurance (TDI) programs to provide income support to individuals who are out of work because of a non-work-related illness or injury.
Disability premiums are based on your age, sex, occupation and the amount of potential lost income you are trying to protect.
In general, the lower the chance that your occupation puts you in harm’s way, the lower the premium. The higher the chance of injury, the bigger the premium. So, for instance, an accountant working in an office would have much lower disability premiums than a construction worker.
Forty-three percent of all people age 40 will have a long-term disability event by age 65. Learn how you can replace lost income and help protect you and your family from an otherwise financially catastrophic illness or injury.