Insurance Tip #9: Disability insurance may be the most overlooked part of your financial plan

Updated

This post is part of a series where personal finance expert Dan Solin provides 10 insurance tips no one else will tell you. See all 10, plus one bonus tip!

If you knew the data, you would take a hard look at disability insurance. Now is the right time since you probably don't have any disability coverage.

There is about a 40% probability that you will have at least one disability that lasts three months or longer before you reach age 65.

Women are more likely to become seriously disabled than men.

The most likely cause of disability is illness, not an accident.

The most common cause of disability is back injury.

More than seventeen million Americans have a disability that limits or affects their ability to perform their work.

Nearly 20% of Americans will become disabled for one year or more during the course of their employment.

If you become disabled, you may be partially covered by Social Security Disability Insurance, by Worker's Compensation (if you were injured at work or if your illness was work related) or by other state and federal programs.

You can purchase disability insurance individually, although it can be quite expensive. If you pay the premiums yourself, then any benefits you receive will be tax free, which is not the case with an employer-paid group policy.

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