Employee Life and Disability Insurance

Determining Disability Insurance Need

There are a couple of questions for anyone to determine if they need disability insurance keeping in mind that it isn't meant for short-term illnesses or injuries.

• Are there other money sources to replace lost income such as savings accounts, mutual funds, and stocks.
• How long could you live without your working income? If you had to break into your retirement savings, could you replace those funds in the future?

These are important questions. Answering them will take you one step closer to determining your disability insurance needs.

Disability Insurance Eligibility

Eligibility for disability insurance depends on both income and profession. Annual income is also a factor in determining the need for disability insurance.

Here's the general breakdown: If a person’s annual income is less than 30 or 40 thousand dollars, the experts say that disability insurance is not necessary. The reason given is that an income in that range would not be impossible to replace. For an income below 20,000 dollars, many insurance companies don’t offer disability insurance.

Professional Danger Zone

Unfortunately, people in dangerous professions may not be able to have disability insurance. Dangerous professions can include such jobs as miner, soldier, police officer, oil-field worker and airplane pilot.

However, it’s always worth checking around because different insurance companies have different opinions about what constitutes a dangerous profession.

Additional Purchase Option

Make sure to look into the possibility of an important option- this is called an “additional purchase option” and it allows the purchase of additional disability coverage in the future without regard to a person’s health at the time of that future purchase.