The statistics are alarming: Nearly one-in-three Americans will become disabled for more than 90 days at some point during their working careers.1 Yet most workers don’t give a second thought to the need for disability insurance.
Many think they are covered through their employer’s benefit plans or sick leave policy, but this is often not the case. In fact, less than 40% of private-industry workers are covered by short-term disability insurance, while only 31% are covered by long-term disability insurance.2
Even if you have insurance through an employer-provided plan, you may not be getting all the coverage you need. Typically, workplace group plans are structured to replace only about 60% of your salary for a set period of time. Could you and your family live on essentially half of your salary for a prolonged time frame? If you think you need more coverage, you may need to purchase a supplemental plan that will boost that replacement rate to 70% or 80% and increase the length of the payouts.
Finding the Right Coverage
What should you look for in a disability insurance policy? Here are some tips to help you find the right one.
1Source: Social Security Administration, Fact Sheet, March 2011.
2Source: American Council of Life Insurers, 2010 Life Insurers Fact Book, November 2010.
3Source: Gen Re, 2010 Gen Re Disability Fact Book, December 2010.
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