Q: When should I buy disability insurance?
A: When you are healthy and when your income is worth insuring.
It really is that simple. Let’s break down the full version of the answer to this question.
Why buy disability insurance when I’m healthy?
Disability insurance is typically less expensive and easier to obtain when you are healthy. Unfortunately disability insurance can be expensive or even unavailable to people with medical issues. Don’t wait until you have an accident or medical problem to buy coverage – it won’t be available then.
What do you mean ‘income is worth insuring?’
Income is worth insuring if the following are all true:
- You depend on your income for payment of bills
- Your income is derived from your own efforts (ie. it would stop if you were sick)
- You can afford the cost of the income insurance (ranges $15/month to $400/month)
If you are healthy and all three are true you should purchase long term disability insurance as a responsible piece of your comprehensive financial plan. If you need your income to pay your bills it means you are financially dependent on your income. If a medical issue impacted your income how would you pay your bills? We have plans available that can pay out millions of dollars in tax free disability benefits if you should suffer an accident or illness. Yes, we said millions. Buy this protection when you’re healthy; it won’t be available after you have a medical issue.
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You might have a lot to lose – calculate your Earnable Income Quotient.
Not-So-Fun Facts:
The following statistics come from CDA’s PDQ disability risk calculator:
- A typical female, age 35, 5’4″, 125 pounds, non-smoker, who works mostly an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:
- A 24% chance of becoming disabled for 3 months or longer during her working career;
- with a 38% chance that the disability would last 5 years or longer,
- and with the average disability for someone like her lasting 82 months.
- If this same person used tobacco and weighed 160 pounds, the risk would increase to a 41% chance of becoming disabled for 3 months or longer.
- A 24% chance of becoming disabled for 3 months or longer during her working career;
- A typical male, age 35, 5’10″, 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:
- A 21% chance of becoming disabled for 3 months or longer during his working career;
- with a 38% chance that the disability would last 5 years or longer,
- and with the average disability for someone like him lasting 82 months.
- If this same person used tobacco and weighed 210 pounds, the risk would increase to a 45% chance of becoming disabled for 3 months or longer.
- A 21% chance of becoming disabled for 3 months or longer during his working career;
1. Council for Disability Awareness, Personal Disability Quotient (PDQ) calculator. Learn more at www.disabilitycanhappen.org
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