Insurance. There are probably no other financial terms more likely to induce feelings of sleepiness. Or dread. After all, who likes to spend money on something you hope you’ll never have to use? And don’t you have enough types of insurance already?

Well, without wanting to sound like an insurance salesperson, how would you pay your bills if an accident or illness left you unable to work? That’s the risk disability insurance is designed to cover. It would pay a portion of your salary in that situation.

The good news is you may already have adequate protection. And even if you don’t, the cost of coverage may not be as high as you feared. Here’s what you need to know about disability insurance.

1. You Might Need It

When you’re young and healthy, it’s difficult to imagine life might ever be different.

However, the insurance industry is quick to point out that your chances of becoming disabled are higher than your chances of dying prematurely. And the Social Security Administration has a scary-sounding statistic to back that up: Some 25% of 20-year-olds will become disabled before reaching retirement age.

However, not all disabilities are the same. Some are severe and permanent. About 10% of all Americans are now severely disabled, according to the U.S. Census Bureau. Many other disabilities are neither severe nor long-lasting. To put the situation in context, the Council of Disability Awareness says the average length of a long-term disability claim is three years.

2. You Might Already Have Some

Even without buying a disability insurance policy, you might already be at least partly covered.
Workers’ Compensation

This program is administered on a state-by-state basis, and some states do not require companies with fewer than four employees to maintain the coverage. However, if you work for a company that does carry workers’ “comp” and you’re injured on the job or develop a work-related disabling illness, this insurance should cover about two-thirds of your pre-disability income.

Still, the National Safety Council points out that only 27% of long-term disabilities are work-related. Most don’t even come from accidents; they come from cancer, heart disease, and other illnesses.

3. You Might Need More

After reviewing all of the above, if you decide to buy additional coverage, check whether it’s offered through your employer. That will typically be the least expensive option.

By Matt Bell

See full story at time.com