Eng-webEveryone’s life and situation is different. Still, many people underestimate their risk of one day becoming disabled.

About 64 percent of wage earners believe they have a 2 percent or less chance of being disabled for three months or more during their working career, according to a 2010 study by the Council for Disability Awareness (CDA); the actual chances of becoming disabled for a worker entering the workforce today are about 25 percent, according to recent Social Security Administration statistics.

Factors that may increase your risk of disability include excess body weight, tobacco use, high risk activities or behaviors, frequent alcohol consumption or substance abuse, and chronic health conditions such as diabetes, high blood pressure, back pain, anxiety or depression.

Do You Need Disability Insurance?

If you do become disabled, Social Security or worker’s compensation may not cover all your needs, the CDA reports. Less than 5 percent of disabling accidents and illnesses are work related; the other 95 percent are not, meaning workers’ compensation does not cover them. The average monthly benefits paid by Social Security disability insurance is only $1,130 a month.

Disability insurance is designed to protect people financially by replacing lost income. The two main types of disability insurance are short-term and long-term. Short-term disability insurance replaces a portion of the policyholder’s salary for a short- period – typically from three to six months following a disability.

Long-term disability insurance coverage typically begins after the policyholder is disabled and unable to work for at least six months. The coverage period can extend for a specific number of years or until the policyholder retires or turns 65, depending on the policy selected and the type of disability.

Disability insurance can be a key component of a strong financial plan. Working with a trusted insurance agent can simplify the process tremendously. If you do not already work with an agent you believe has your best interests in mind, please call our office for an independent, objective referral.