Disability insurance is a very specific type of insurance and one of the most important insurance coverages you can have in place to protect yourself and your family. Disability insurance insures that you will receive at least a portion of your income if you are injured or sick and can not work. If you are disabled and cannot work, you will still need income – as will your family – to pay for basic necessities, such as the mortgage or rent, groceries, utilities, and other typical daily expenses.
Think of disability insurance as insuring your paycheck. We all insure our cars and homes but often we neglect to insurance our main source of income, our paycheck.
Connecticut disability insurance comes in a variety of types, which include the following:
- Short-term disability insurance This insurance kicks in after your employer-based sick leave has been exhausted. It is typically used to cover you for a few weeks or even a few months when you are unable to work either due to illness or injury.
- Long-term disability insurance This insurance protects you in the event of an extended disability and is one of the most important insurance coverages to have.
Plus there are group plans and individual plans:
- Individual plans cover those who are self-employed or are not covered by an employer. Individual plans also cover those who choose to opt out of an employer plan and purchase a more comprehensive policy.
- Group plans cover those members of a group, either an employer, a professional industry group, or other group. Group coverage can be provide on a non-contributory basis, contributory or voluntary basis.
Who needs disability insurance?
According to recent statistics by the American Council of Life Insurers, one third of all Americans between the ages of 35 and 65 will become disabled at some point during their lives for at least 90 days. One in seven workers will be disabled for more than five years. The truth is that while most people think disabilities are caused by out-of-the-norm freak accidents, the majority of disabilities are caused by illnesses such as cancer, diabetes, and heart disease, which can affect anyone.
The loss of income while you are unable to work can be devastating to yourself and your family. In some cases, leading to foreclosure and bankruptcy. So people who need disability insurance are those who earn an income on which they depend for every day living expenses.
Yes, that's just about everyone – you included.
Can you afford to be without income for one year? Do you have enough saved to cover all your everyday expenses (food, mortgage, utilities, etc.) plus the additional medical bills while you work on recovering? Even the most careful saver is not likely to have that much stored away.