Disability Insurance: Protecting Your Income
Disability insurance is a type of coverage designed to replace lost income if you become unable to work due to illness or injury. While health insurance covers medical expenses, disability insurance ensures that you can continue to meet your financial obligations, such as bills, mortgage payments, and other living expenses, even if you’re unable to earn an income.
There are two main types of disability insurance: short-term and long-term. Short-term disability insurance provides coverage for a limited period, typically between three to six months, while long-term disability insurance offers more extended protection, often lasting several years or even until retirement age.
For many people, their ability to work is their most valuable asset. Disability insurance helps protect this asset by providing a percentage of your salary if you become disabled. The policy will typically pay out between 50% to 70% of your income, depending on the terms.
When purchasing disability insurance, it’s important to consider factors such as your occupation, income, and the potential risks you face in your job. Disability insurance is an important part of any financial plan, providing security and stability in the face of unexpected challenges.
