Insurance Advice on When it Makes Sense to Buy Disability Insurance

Written by , July 16, 2012

Insurance Advice on When it Makes Sense to Buy Disability InsuranceAs the insurance industry continues to evolve there are an increasing number of options for insurance coverage. We can insure ourselves against practically any type of risk we may encounter, so we need to decide which policies we need and are willing to spend our money on.

One type of insurance you might consider is disability insurance. Disability insurance provides you with ongoing financial benefits if you should ever be unable to work because of an injury, illness or other disability.

Here is some insurance advice for you to consider when trying to decide whether it makes sense for you to buy disability insurance.

  • When You Have Family Responsibilities. If you have a family, then you’ve probably already purchased a life insurance policy for yourself. You buy life insurance as a replacement for lost future income in the event that you pass away. But what if you suffer a debilitating injury or illness? You may lose the ability to work, and lose that future income, but you won’t receive any benefits from your life insurance policy. Disability insurance can help protect your financial family’s well-being if you can’t work due to a disability.
  • If Your Work Doesn’t Offer Adequate Coverage. Some employers offer a measure of disability coverage to their employees at no charge to the employee. Unfortunately, in order to save money, fewer employers continue to offer this benefit. Those that do offer it generally provide a fraction or perhaps a multiple of the employee’s annual salary amount as a benefit. If your employer doesn’t offer you disability coverage, or doesn’t offer sufficient coverage, then you may wish to consider purchasing additional disability insurance for yourself.
  • If You’re Self-Employed. Self-employed individuals may have a particular need for disability insurance, since they don’t have the same flexibility when it comes to taking sick leave or time off from work. When self-employed individuals don’t work, they don’t have an income. If you work for yourself then you should consider buying disability insurance to make sure that you still have income if you experience a debilitating injury or illness.
  • If You’re at Greater Risk of Illness or Injury. If you believe that you’re at a greater risk for illness or injury than the average person – perhaps if you have a family history of certain types of illness – then it might make sense to buy disability insurance coverage.
  • If You’re Still Building Your Emergency Fund. If you’re still at the early stages of building up your emergency fund, then you don’t have much of a financial cushion to help you through a period of no income if become unable to work. In these circumstances having disability insurance coverage could be quite valuable.
  • Like any other type of insurance, it’s important to consider all the facts of your particular situation before deciding to buy coverage for yourself.

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