You’re in top form at home and at work. Your boss loves you, you’re on your way up the career ladder, and you’re in the best shape of your life. What could possibly go wrong? Unfortunately, things do go wrong and some seemingly healthy workers become temporarily or permanently disabled.

Many young workers and entrepreneurs see disability as a ripoff if they’re in good health, but is that the case? Can disability insurance fill a gap in your coverage or is it a scam? I decided to look into it a bit further.

What Exactly is Disability Insurance?

The goal of disability insurance is to provide a percentage of your income for your family while you’re disabled.

  • Short Term: While policies vary, it’s generally for 6 months of coverage. Payments generally start after you’ve used up your sick days and paid time off.
  • Long Term: This policy coverages more extensive injuries and can last for years.

Some employers offer limited short term disability to its employees. To see if your company does, please contact your Human Resources Department. It great to know what you’re already covered for so you don’t duplicate if you decide to get a policy. If you live in California, Hawaii, New Jersey, New York, or Rhode Island you may be entitled to these benefits by state law.

Disability Insurance Cost and Coverage

While premiums vary company to company based in part on the individual, the general rule of thumb is that higher premiums are associated with more benefits. Shopping around is the best piece of advice on finding the best value.

If you’re self-employed this can be a lifeline until you get back on your feet. As mentioned before, if your employer offers this as a benefit you have to decide if additional coverage is needed. I would talk it over with your spouse at the very least to make sure you’re covering your bases.

It pays to look over your policy carefully, some insurance companies offer some wonderful benefits while others are basically a rip off with all their terms and conditions. If you decide on getting some disability insurance make sure you check the following:

  • Benefit amount – Are you getting a percentage of your regular income or a fixed amount?
  • Benefit period – If you sign up for long term disability, please make sure you have coverage that serves your needs. Some offer for a few years, but there are policies that are much longer.
  • Definition of disability -How does this policy define disability? Is it limited to being disabled in terms of your job or is it for any related job?
  • Extent of disability – Do you have to be completely disabled or does the policy allows some coverage if you’re partially disabled?

the last thing you want to deal with on top of a disability is the paperwork and hassle from a bad insurance company. Go ahead now and do the footwork to save yourself time, money, and stress.

Thoughts on Disability Insurance

How many of you have disability insurance? Who did you get it through? If not, why? Do you think it’s a waste of money? What’s the worst policy you’ve seen? What’s the best?

If you’re getting your insurance squared away, here are some posts on GPT to help you out: