Regardless of what type of insurance a consumer is looking into, the question of how much always comes into play. How much coverage do you need on your car? Is your home insured enough to replace things should something happen? One of the most often overlooked types of insurance, especially by the younger generation, is disability insurance.
Benefits of Disability Insurance
Disability insurance works to provide a person with a portion of a paycheck should they go through some type of physical injury, sickness, or harm that makes work impossible. Not all policies are the same. Some offer different percentages of a paycheck to consumers. Employers may offer this to employees, or they may provide them with an option to purchase the insurance using a paycheck deduction. For those that don’t have the option to purchase disability insurance through an employer, it is possible to purchase it in the open market.
Often Overlooked Necessity
Health insurance and auto insurance seem to be a part of life for most people. They can’t imagine living without it. But because the probability of injury or sickness for many people seems low, they don’t believe they need this type of coverage. Unfortunately, many consumers don’t even realize this type of insurance is available or necessary until it is already too late and then need it to get them past a difficult time in life. According to U.S. News & World Report, less than half of workers from the Generation Y age group have disability insurance. This, when coupled with the suggestion by the Social Security Administration that workers have a 3 in 10 chance that they will be considered disabled at some point before they reach the age of 65, is alarming.
How Much is Needed?
Even individuals interested in disability insurance struggle with how much coverage they need. A policy offered at work may be less expensive but provide a lower percentage of a worker’s paycheck should they need the disability insurance. On the other hand, a person may get a larger percentage of their paycheck with an independent policy, but they tend to cost more, with the premiums based on a person’s health exam. Some type of disability insurance is preferable; however, each person must decide for themselves on the right amount of coverage to be comfortable.
According to The New York Times, a benefits consultant or human resources representative can work up figures to help a person understand the bottom line difference between a disability policy that covers 40% and one that covers 60%. Check out Money Tips for more information on disability insurance premiums.
No matter what a person’s age or occupation, it makes sense to consider the benefits that disability insurance offers. If it isn’t something that was looked at in the past when the time came to sign up for employee benefits, now is the time to take a look at the policy offered and see what’s available in the overall insurance market. Just like other types of insurance, it helps to err on the side of caution.