Your most important asset is not your home, your car, your jewelry or other possessions. It’s your ability to earn a living. Think about it: All of your plans for the future—from buying a home to putting your kids through college to building a retirement nest egg—are based on the assumption you will continue to earn a paycheck until you retire. But what would happen if those paychecks stopped? That’s where disability insurance comes in. It provides an income to you and your family if you are unable to work because of illness or injury.
Your income is typically your largest asset. Think about how much you earn in a year and what that would be over a lifetime. The financial consequences of a lengthy disability could literally cost you millions. A 25-year-old worker who makes $50,000 a year and suffers a permanent disability could lose $3.8 million in future earnings. You don’t hesitate to insure your home, car and other valuable possessions, so why wouldn’t you insure something that is much more valuable than all those things?
If you’re still not convinced that your income is worth insuring, think about how long you’d last without your paycheck before it would be difficult to pay for everyday expenses. The LIFE Foundation conducted a study that found that half of working Americans couldn’t make it one month before financial difficulties would set in. Close to one in four Americans wouldn’t make it a week. In the event of a disabling illness or injury—and the odds are much greater than you might realize—disability insurance provides you and your family with a source of replacement income to help make ends meet until you’re able to return to work.
Explore this section to learn more about disability coverage, including the different sources of disability income protection and ways to get coverage. The Disability Insurance Needs Calculator can help you determine how much coverage you need.
- Who needs it?
- Sources of income protection
- Disability needs calculator
- Where do I buy it?
- An example
- Life events
- Key terms
- Printable consumer guide (PDF)
- Find out your personal disability quotient