Checking off your life list: Disability insurance

Woman researching and understanding more about disability insurance.

Does it seem like your life has a checklist? First job? Check. Starting to save for retirement? Check. Insurance? It’s complicated.

Disability insurance may seem like one of those things you can postpone until later—or not do at all. But checking it off your life list now will make sure you’re protected in the event of the unexpected.

Protect the life you’re building

Maybe you’ve bought your first home. Or you’re making solid progress on student loans or starting an emergency fund. These are all great accomplishments—and they’re worth protecting.

Disability insurance does just that. It covers your income if you’re too sick or hurt to work. It can help you maintain the same standard of living you’re used to, without derailing your personal and financial goals.

The benefits of disability insurance

Don’t let the name fool you—disability insurance isn’t just for when you get hurt in an accident and can’t work. In fact, most of the time, people use it when they can’t work because of illness.

Beyond offering a safety net when you can’t work, an individual disability insurance policy:

  • Helps bridge the gap in pay not covered by an employer-provided disability insurance policy (most pay around 60% of your income and any benefits received are taxed)
  • Works as a stand-alone policy
  • Covers illnesses and injuries
  • Stays with you, even if you change jobs or careers
  • Is customizable to your needs and budget

Disability insurance vs. life insurance

Most people are more familiar with life insurance and its purpose. If you’re thinking of purchasing life insurance, that’s great—just consider complementing it with disability insurance, too.

Think of it this way: Life insurance provides for your family financially in the future. Disability insurance covers you today, if you need it. You’ll be able to move through life, knowing that the achievements you’ve worked so hard for—as well as new accomplishments—are better protected.

How disability insurance can fit into your life’s plan

Of course, taking on new goals or expenses—like saving for the future or buying an insurance policy—may seem challenging. But it might be more manageable than you think.

The cost of a disability insurance policy is usually around 1–3% of your annual income.1 That’s about the cost of a monthly date night or cable bill, which is a relatively small addition to your budget. 

Another consideration: The cost of individual disability insurance tends to increase as you get older. But most policies let you lock in your premium rate. That means if you buy a policy now, you can get a lower rate—and enjoy it for years to come.

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How much income protection do you need?

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1 Disability income insurance calculations are based on a variety of factors. Disability income insurance also has limitations and exclusions. For specific costs and complete details of coverage, contact your financial representative.