Understand your individual risk level to make a smart and informed choice about the best policy for you and your loved ones

Homeowner’s insurance. Life insurance. Hurricane insurance. When we think of insurance, these are the kind of policies that usually come to mind. Rarely, if ever, do people think of disability insurance. Perhaps that’s because the chance of a healthy adult getting a serious, multi-year disability is relatively small. However, despite the small chances, the consequences for the individual and his or her family in the wake of a disability can be enormous– especially if the disability permanently affects their ability to succeed in their career.

Thinking about the potential outcome of a serious accident can easily change one’s opinion about the importance of disability insurance. Perhaps that’s why so many younger people– especially young parents– are realizing that for them, getting disability insurance isn’t a farfetched notion. Instead, it could be an essential way for them to help guarantee their family’s financial security in the case of an unlikely but devastating crisis.

Look at several factors to determine your personal risk level

While disability insurance can be a great tool for many people, you still don’t want to purchase a policy unless you really need it. That’s why you should take a look at multiple factors– including your age, medical condition, current and future career options, expenses, assets, and dependents to determine if you need disability insurance, and if you do, how much.

http://mccallsnurseries.com/wp-json/oembed/1.0/\"http:\/\/mccallsnurseries.com\/\" • Age: Individuals under the age of 30 or 40 are less likely to get injured or disabled from a disease

Chihuahua • Medical condition: If you have no known medical conditions, and your immediate family is relatively free of genetic and inherited diseases, you’re less likely to need insurance. If many conditions run in the family, you should probably consider it.

• Current and future career: What is the injury and/or disability rate for your job? Even if it’s very low, could an off-the-job accident easily affect your ability to do your job well? Does your job require running, great physical dexterity, or other skills that a disabled individual may not have?

• Expenses: How much does it cost per month for you to maintain your current (or similar) lifestyle? How much is that amount likely to increase in the future? How much could your medical costs amount to if you got into an accident?

• Assets: With the amount of money you currently have saved, how long could you support yourself and your family without your job? What assets could you sell to help support you and your family during this period?

• Dependents: How many children under 18 do you have right now? If you have 18+ kids, will you be paying college tuition and other expenses for them? Do you have any parents, in-laws or older family members that you support financially? Do you expect any of this to change soon? Usually, it’s much more important for parents with young children to get disability coverage, as child care expenses are often high and it may be difficult to afford them without an income.

Choose carefully, disability insurance can be somewhat pricey

Expense is yet another reason why disability insurance may be relatively unpopular when compared to other forms of insurance. Unfortunately, in many cases, some forms of disability insurance are nearly 100x more expensive (for the same amount of coverage) than the average life insurance policy. Why so pricey? Well, the number of people purchasing disability insurance is still small– and insurers need to effectively spread risk over a large population to get their money back. So, to compensate for the extra risk, prices often are increased.

Plus, people who know they’ll need disability insurance (manual laborers, people with genetic predispositions to diseases) are more likely to buy it, which raises prices for everyone when they cash in on their policy.

Employer vs. private insurance policies and regular vs. additional policies

A lot of disability insurance policies are purchased through an individual’s employer. For people who have this option, disability insurance is significantly (often around 3-4x) less expensive– so if you want disability insurance and think your employer might offer an option, you should take the time to check.

It’s also important to note that most policies do not pay more than 50-60% of an individual’s salary, so you if you feel you need 100% salary coverage, you’ll likely have to pay an additional overcharge. Much like the market for disability insurance itself, the market for full salary coverage policies is incredibly small– and most people who purchase them expect to get injured, which makes 100% coverage policies quite expensive.

Understanding disability insurance waiting periods can save you serious hassles

Most disability insurance policies have waiting period of either 90 or 180 days (around 3 or 6 months.) This helps keep costs down by reducing the number of claims for short-lived or non-serious injuries. Due to their greater potential monetary value and improved flexibility, 90 day-wait plans are more expensive than their 180 day-wait counterparts.

When it comes to disability insurance, make a smart choice for your individual situation

With one in four adults becoming disabled before the age of 67, everyone should at least think about getting disability insurance– but the amount and type of coverage should be uniquely tailored to individual’s wants and needs. Even if you think you’re too young to worry about a disability (and, if you’re single and in your 20s, you just might be) it can’t hurt to learn a little bit more about your options down the line.

Want more information about how different types of insurance may be able to help you and your family? Avante Insurance can educate you on various types of insurances that can suit your family’s needs.