The COVID-19 outbreak has led many Americans to take a closer look at their insurance. 

Whether this means increasing existing coverage or exploring new types of coverage altogether, disability insurance is typically one of them.

But it shouldn’t take uncertain times like these to get people thinking about income protection. Here’s why:

• According to the Social Security Administration, 25% of working Americans will experience a disabling event that prevents them from working for at least one year before reaching normal retirement age. 

• At the same time, a recent study by GOBankingRates reports that 48% of Americans do not have enough savings to last them longer than three weeks.

This reality highlights the need to be proactive by protecting your income with an individual disability insurance policy—global pandemic or not.

Protecting Your Income With Individual Disability Insurance

Individual disability insurance is the best way to protect your source of income from serious injuries and illnesses that prevent you from working. An individual disability insurance policy allows you to personalize your coverage to meet your unique financial needs. This type of policy is portable, which means it will stick with you if you change employers or even switch job occupations.

Remember: you are insuring your ability to earn a paycheck now in case you lose the ability to earn a paycheck later. So in order to be eligible for individual disability insurance, you must be employed when you apply for coverage. Typically, this means working at least 30 hours per week, earning at least $14,000 annually, and having 12 months of verifiable income to prove it; however, requirements vary by insurer.

Individual disability insurance is not limited to W-2 employees. It’s available to 1099 workers, such as independent contractors, freelancers, and gig workers, too. In fact, the argument can be made that it’s even more important for the self-employed given the benefits they miss out on by not working for a traditional employer.

The cost of individual disability insurance depends on a number of factors, including your health history, job occupation, and policy choices. The younger and healthier you are, the lower your monthly disability insurance premiums will be. Putting a plan in place early on in your working life will allow you to lock in the most affordable rate possible.

An individual policy can be purchased in the form of short-term or long-term disability insurance. Short-term disability insurance is best for temporary conditions that may take a few weeks to recover from. Think of a broken wrist, pregnancy, or a mild case of COVID-19. Long-term disability insurance is best for serious injuries and illnesses that may last several months, years, or even permanently. Think of heart disease, cancer, arthritis, or long-term health issues resulting from a severe case of COVID-19.

A digital insurance company like Breeze can help you assess your disability insurance needs and conveniently apply for coverage 100% online. Get started with a free, personalized disability insurance quote here.

Other Coverage Options Just Don’t Stack Up

Individual disability insurance is overlooked because people think they already have coverage through the government or their employer. While that may be the case, the benefits offered by these types of coverage are usually insufficient.

• Social Security Disability Insurance (SSDI) is not guaranteed. Unfortunately, only 30% of claims for SSDI are approved. Even then, the estimated average payment for SSDI is only $1,258 per month in 2020.

• Group disability insurance may be available through your employer. While group coverage is certainly nice to have, benefits are limited and coverage will be lost if you leave your employer for any reason.

• Worker’s compensation only covers disabling events that are a direct result of work. Contrary to popular belief, the overwhelming majority of disabling injuries and illnesses happen outside of work.

As you can see, these types of coverage all have shortcomings that make them difficult to rely on. That’s why it’s smart to buy an individual disability insurance policy that is tailored to meet your unique financial needs. 

Proactive Now, Thankful Later

In general, insurance is something you buy that you hope you never need to use. In the event that something happens, however, you can be thankful that you prepared for the worst-case scenario ahead of time.

Disability insurance is no different. It empowers you to protect your ability to earn a living and everything that it provides for you and your loved ones. It can help pay the bills and put food on the table while you recover from a disabling event. It allows you to maintain your quality of life in your time of need.

While a global pandemic is certainly an extraordinary example of an unexpected event that can prevent you from working, it highlights the need for disability insurance all the same: 

Anything can happen, at any time, to anyone. 

Being proactive now allows you to find the right disability insurance coverage for your needs and enjoy financial peace of mind. Take the first step toward protecting your income and get a quick disability insurance quote from Breeze today.

Colin Nabity is the CEO and Co-Founder of Breeze, a digital-first insurance company that offers simple, affordable disability insurance for working Americans.

Sources

Council for Disability Awareness: Chances of Disability

The Motley Fool: Nearly 50% of Americans Don’t Have Enough Emergency Savings to Get Through the COVID-19 Crisis

Investopedia: What Are the Maximum Social Security Disability Benefits?

Breeze: What Is Disability Insurance?; Long Term Disability Insurance