Who Needs Disability Insurance?

May 2 | 2023
Who Needs Disability Insurance Photo by Rodnae Productions from Pexels

What would happen if you were suddenly unable to work due to an illness or injury? Think about it: without your paycheck, how long would you be able to make your mortgage or rent payment, buy groceries or pay your utilities, car payments and credit card bills, without feeling the pinch? If you’re like most Americans, it wouldn’t be long at all. That’s where disability insurance comes in.

Disability insurance can serve as a security blanket, of sorts, providing those who are out of work with an income stream to help make ends meet. This can ease the stress and mental burden that often accompanies time spent away from work. Too much stress can lead to illness or injury in the future, so disability insurance can even help to prevent potential issues in the years to come.

What is Disability Insurance?

Disability insurance in Utah can replace your lost income if you’re unable to work due to illness or injury. Think of it as insurance for your paycheck, which is likely your most valuable asset. Half of working Americans couldn’t make it a month before financial difficulties would set in when faced with the loss of a regular paycheck due to extended illness or injury. Short-term disability insurance and long-term disability insurance provide a way to avoid dipping into savings or going into debt during an emergency by providing a percentage of your income.

What Does Disability Insurance Cover?

Disability insurance is designed as a replacement for income, but it does not cover 100 percent of a person’s salary. Depending on the specific policy, it usually covers 40 to 60 percent of the policy owner’s salary. Keep in mind that most policies include reimbursement limits and income caps, which may require the need for a supplemental disability insurance policy to cover gaps if you’re a high-income earner.

Who Needs Disability Insurance?

The average worker has a 30 percent chance of becoming injured, ill or disabled at some point during their lifetime—yet, 51 million American workers are without disability insurance, including 52 percent of all single female workers. Disability insurance is also crucial for self-employed workers. If you financially support a spouse or partner, children or even aging parents, disability insurance can provide protection and help make sure they’re cared for if you’re unable to work due to a disability claim.

Believe it or not, most disability claims don’t stem from on-the-job injuries. The most common claims are due to illness, cancer, pregnancy, carpal tunnel, back pain and mental health issues such as depression and anxiety. Long-term disability insurance can effectively pick up where short-term coverage leaves off, providing an additional 90 days to one year after the elimination or waiting period.

Thanks to the recent economic and health climate, Americans have changed their expectations about workplace benefits. In addition to traditional benefits like health insurance and life insurance, many employees also consider unpaid leave a must-have benefit. That’s why experts like Fringe Benefit Analysts recommend choosing a long-term disability insurance policy for the most comprehensive and cost-effective coverage.

While almost every employee could benefit from short-term or long-term disability insurance, these four types of people have the most at stake:

1. Those in Physically Demanding Jobs

If you work in a physically demanding field, such as construction or manufacturing, then you are at a higher risk of injury simply due to the physical tasks that you repeatedly perform every day on the job. Most employers offer a decent workers compensation plan, but short-term disability insurance or long-term disability insurance can ensure that you have the income you could potentially need if you find yourself laid up with an injury.

2. Parents

Minor children are completely dependent on their parents’ income, making it essential that parents who work take advantage of disability insurance. Children must have their physical needs met whether parents are healthy or not, so the extra funds that come from disability coverage are needed when parents are unable to work.

3. Sole Providers

Those who are the sole providers for their families have the heavy burden of making their earnings work for several people, often including children. The financial support that comes from disability insurance is invaluable when sole providers need to focus on getting back to work.

4. Those With Recurring or Chronic Injuries

Anyone who deals with recurring injuries, such as back problems, shoulder issues or repetitive motion injuries due to the nature of their employment, should look at disability insurance as a safety net for when those injuries flare up. It is unfortunate that these issues can return time and again, but disability insurance eases that worry.

Is Disability Insurance Worth it?

Many employers offer short-term disability insurance that can replace up to 60 percent of your income for three to six months, depending on company policy. These policies are contingent on your employment with the company. If your injury or illness leads to job loss, your disability insurance benefits are lost, too. When you apply for a supplemental disability insurance policy, however, you’re in control. As the policy holder, you choose exactly how much you want to receive each month as a benefit and how long you want it to last.

For many people, disability insurance is worth the extra cost simply due to the peace of mind that it offers. Knowing that there is a backup in place should the worst happen can ease the mental burden that many employees feel, especially when they are already worried about finances.

How to Get Disability Insurance

Fringe Benefit Analysts is an experienced, full-service, health benefits consulting firm providing disability insurance policies in addition to small business health insurance, vision, dental, group life, accidental death and dismemberment (AD&D) and other voluntary employee benefits. What measures are you taking to protect your income? Call Fringe Benefit Analysts at 801.546.6004 to learn how disability insurance can help protect yourself, and your loved ones, against loss of income due to injury or illness.