Nobody wants to think about getting hurt or succumbing to a disease that makes it hard for them to work but according to the Council for Disability Awareness a 20-year old worker has 1 in 4 chance of this happening before they retire.
The federal government and the state of New Jersey provide workers with disability coverage, as do many employers, but even so many workers find that having additional private insurance makes sense.
What is disability insurance?
Disability insurance replaces a portion of a worker’s income if they become disabled and are not able to work. Disability insurance can cover you for short breaks in work or for the long term. Short-term disability policies usually cover no more than two years, whereas long-term policies typically cover you for a few years to the rest of your life. Long-term policies can take up to several months before they kick in whereas short-term policies may come into effect almost immediately.
Who needs the coverage?
If your family counts on you to help pay the bills, it is important for you to have disability coverage. Most of us would suffer a great financial hardship, if we went without our regular income for a sustained period. One injury or illness could cause you to lose everything that you have worked so hard to build.
Company plans
Many employees receive disability insurance through their employer (often shown as “LTD” on your payroll slip for “Long Term Disability”). This type of insurance is worth having but often covers you for only about 60% of your current income. You may be able to buy additional coverage through your employer, which can be a good value as your employer may have “group buying power”.
What about the government?
Most government programs are designed to keep disabled workers out of poverty but not to support their current lifestyle . About 60% of disability claims in New Jersey are approved, which is actually better than most states, but dealing with the government can be a slow and sometimes frustrating process.
Do you need additional coverage?
If you’re not sure whether your current savings and disability benefits will be enough to maintain your lifestyle then you should speak to an insurance agent. John B Wright can help. Contact us here for more information.
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