Although many people believe themselves to be impervious to disabling accidents, extended illnesses or even unexpectedly extended surgical recovery periods, the fact remains that even the fittest of us can succumb to any of these, preventing us from performing our jobs, and resulting in loss of income. Disability Insurance can allay concern over loss of income by providing coverage for a portion of your income. Here are a few of the most common reasons given for purchasing disability insurance:
- Peace of mind— Knowing that your family will not have to suffer financially from a loss of income caused by a disability that prevents you from performing your job and losing your income.
- Limited savings— Without significant savings, the family’s living expenses would not be covered for an extended period of time, causing hardship.
- Sole wage earner in the household— The non-disabled spouse might be able to seek employment, but it is likely to take some time before employment actually begins, and the salary might not be sufficient to cover the family’s living expenses.
- Income replacement— Proceeds from a disability insurance policy can replace all or a portion of the wage-earner’s income lost due to disability.
- Complement to existing disability benefit plans— There are various public and private disability plans for which you might qualify, but they may not be sufficient to cover your financial exposure due to a disability.
- Lock in a low premium and future insurability at a young age— Premiums for disability insurance will never be more affordable that they are today. Purchasing early guarantees that future events will not keep you from qualifying for coverage.
Each of the examples in this section will present a unique family dynamic: single; married without children; married with children; empty nesters; retired, and will place each of the reasons for purchasing disability insurance (see above) into one of three categories:
- Reasons to purchase coverage now
- Reasons to consider coverage
- Not currently applicable to the scenario
The rationale for why Disability Insurance is or is not recommended in each scenario will be provided in the Overview section.