May is Disability Insurance Awareness Month, a dedicated time to raise awareness about the importance of disability insurance and to encourage people to protect their most valuable asset – their income. While many people understand the need for health, life and auto insurance, disability insurance is often overlooked despite its critical role in financial security.
What Is Disability Insurance, and Why Is It So Important?
Disability insurance provides income replacement if you become unable to work due to an illness or injury. Unlike health insurance, which covers medical expenses, disability insurance ensures you can still pay your bills, mortgage, groceries and other living expenses when you cannot earn a paycheck.
And that is more common than you may think:
- High risk of disability: According to the Social Security Administration, nearly 1 in 4 workers will experience a disabling condition before retirement age.
- Long recovery periods: Disabilities can last months or years, making savings alone insufficient to cover ongoing expenses.
- Protecting your lifestyle: Disability insurance helps maintain your lifestyle and financial obligations during difficult times.
Types of Disability Insurance
There are two kinds of disability insurance: short-term and long-term. Short-term disability insurance provides benefits for a limited period, typically 3 to 6 months. Long-term disability insurance offers benefits for extended periods – potentially until retirement age. Both types can be obtained through employers or purchased individually – and both can be a lifesaver when you need it.
For example, you may think, “I’m young and healthy; I don’t need it.” But disability can happen to anyone at any age. Another misconception is: “I have savings to cover expenses.” But most people underestimate how long a disability can last and the amount of money that will be needed. Yet another mistake is thinking that “Social Security will cover me.” The reality is that Social Security disability benefits can be difficult to qualify for and may take months to begin.
Four Steps To Take This Month
Because May is Disability Insurance Awareness Month, here are four things you can do this month to make sure you’re prepared:
1. Evaluate your needs: Consider your current financial obligations and how long you could manage without your income.
2. Review existing coverage: Find out whether your employer offers disability insurance and understand the terms.
3. Consider supplemental insurance: If employer coverage is insufficient, look into private policies.
4. Consult a professional: Talk to an insurance advisor to tailor coverage to your situation.
Protect Yourself and Your Income
Disability Insurance Awareness Month is a crucial reminder that protecting your income is as important as protecting your health. By understanding the risks and securing appropriate coverage, you can safeguard your financial future and gain peace of mind.
Take action this month – invest in your protection and spread the word about the importance of disability insurance. Your future self will thank you.
Greg Aldridge is is a Lenexa-based State Farm insurance agent and a WestEnd Neighbors Expert Contributor. To find out more about disability insurance, contact him at 913-492-6080 or greg.aldridge.mkb0@statefarm.com or visit www.gregaldridgeSF.com.
