10 Things You Should Know About Disability Insurance

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Disability Insurance : Disability insurance provides essential income protection in the event of injury or illness and should be included as part of any financial plan.

Employers typically offer group disability policies, but these may not be portable. Speak with your financial professional about individual coverage.

Individual policies may be purchased either through a licensed independent insurance agent or directly from an insurer, with some policies featuring an “Increase Option Rider,” which enables policyholders to add benefits without further underwriting requirements.

1. Disability is a normal part of life.

Disability isn’t as rare as many may believe – approximately one out of every five people will experience some form of disabling illness or injury during their lives.

Disability insurance protects you from financial risk caused by accidents or illness, helping ensure you can continue providing for the needs of your family even if working full-time is no longer an option.

Disability policies come in various varieties, each offering different advantages and drawbacks. Some policies offer shorter elimination periods than others, and cost-of-living adjustments can also be added if necessary. Some policies even feature recovery benefits that provide part of your benefits during the early stages of disability; other riders might be useful, such as an own-occupation definition or guaranteed renewability provisions.

2. It’s not a preexisting condition.

It's not a preexisting condition.
It’s not a preexisting condition.

Disability policies don’t discriminate based on medical history; however, they often contain preexisting condition exclusion clauses to mitigate risk.

When claiming an injury or illness, insurance companies review all medical records from your policy’s look-back period. When dealing with asthma attacks or chronic back pain, for example, insurance providers will closely inspect how frequently and whether treatments were invasive or conservative, along with any additional information they feel relevant in order to assess whether disabling conditions predate coverage – the more permanent your condition, the closer they may scrutinize treatment records in search of preexisting conditions that might void coverage; so preexisting conditions must be disclosed when dealing with insurance providers! If an issue does arise and coverage cannot be granted, all preexisting conditions must be disclosed when making claims.

3. It’s not expensive.

Disability insurance may not be a cheap purchase, but it remains an excellent way to safeguard your income. Many policies offer enough coverage to replace 50% to 70% of lost income should an illness or injury strike.

When shopping for an insurance policy, keep the elimination period (the time required to start receiving benefits) and benefit period in mind; these periods can range anywhere from 30 days up to age 65. In addition, riders such as cost of living adjustment or future purchase riders may help add value while increasing premium costs.

Your financial professional is ready to assist in creating an individual disability insurance package tailored specifically to your needs. Get in touch with them now so they can get you on track!

4. It’s portable


Just like property and casualty insurance, disability insurance reimburses you for the money that would otherwise be lost due to being temporarily or permanently disabled from working. Its cost will depend on both its severity and your specific policy.

Many employers provide disability insurance as part of their benefits packages. Still, it’s not portable if you leave for another job that does not provide it or decide to take locum shifts.

The ideal policies are tailored specifically to occupation and specialty, using their occupation definition of disability, which allows physicians to receive a portion of their salary should they become permanently disabled from performing material and substantial duties in their field of employment. Other policies use any occupation definition, which is more restrictive.

5. It’s tax-free

Disability insurance premiums may not be tax-deductible as it’s intended to replace income rather than cover medical costs; however, policy benefits tend to remain tax-free.

Some policies offer disability coverage that pays out if your injuries prevent you from performing any occupation. In contrast, others only pay if they keep you from performing certain types of work. To reduce premium costs and increase the chance of paying out more often, seek a policy with a narrower definition of disability.

Consider riders such as recovery benefits that provide early partial payments upon recovering from injury and cost-of-living adjustments that automatically increase benefits over time. It is wise to consult a financial professional prior to making decisions regarding which riders to add or delete from your disability policy.

6. It’s not mandatory.

There is a significant portion of people in the US who do not require disability insurance at all; even for those who do, some preexisting conditions could prevent them from qualifying.

Some insurers disqualify applicants based on their health history; other policies have stringent underwriting that excludes certain conditions like pregnancy or surgery from coverage. For those unwilling to take that risk, individual disability policies exist that require less stringent health underwriting.

New York businesses must provide employees with mandated disability benefits; however, these amounts only replace part of an employee’s wages and may not cover enough living expenses to sustain most individuals. Therefore, many choose to supplement their employer-provided disability coverage with personal policies of their own.

7. It’s not guaranteed.

not guaranteed
not guaranteed

Disability insurance may not seem appealing; its concept often brings to mind accidents or worst-case scenarios, thus leading many to choose against purchasing it.

Individual disability policies generally require a medical exam and contain various exclusions that could cancel or increase premium payments at any point in time. To minimize risk, look for policies with non-cancelable and guaranteed renewable terms to avoid cancellation or increase of premium payments in the future.

No matter the cause of your disability, it is essential to protect yourself and your family with an income protection plan that goes beyond salary-only protection. Speak with a financial professional today about how best to secure your income – Breeze provides individual long-term disability insurance with an online application process and automated underwriting, which makes getting quotes much simpler!

8. It’s not a life insurance policy.

 life insurance policy
life insurance policy

Disability insurance differs from life insurance in that it pays out if an injury or illness renders you incapable of working, making it an invaluable part of any financial plan.

There are policies available that cover only part of your salary or can completely replace all your income, depending on your policy’s definition of disability. Group policies tend to provide more restrictive definitions, while individual ones can have more open definitions, allowing workers to still perform some occupations but earn less money.

Contact a Guardian financial professional to understand how disability insurance fits into your financial plan. We offer individual long-term disability policies or can add on extra coverage based on group policies already in effect.

9. It’s not a retirement plan.

Disability policies are intended to safeguard your income in case of unexpected medical expenses. They’ll enable you to pay your bills and meet financial obligations without depleting savings accounts or incurring debt.

Disability insurance policies can be purchased as either part of an employee group policy at work or independently through brokers and advisors. Most policies will include an elimination period and benefit period; additional riders such as cost of living benefits or compounding residual benefits may also be included, along with options like the future purchase or reinstatement riders.

10. It’s not a safety net.

Disability insurance provides financial security against unexpected events that could leave you unable to work for an extended period. Disability coverage helps minimize financial setbacks while protecting one of your most valued assets: Your ability to work.

Most employees receive coverage through a group plan at work that does not require underwriting or premium payments. At the same time, individual policies can also be purchased, often offering riders the option to add optional coverage at additional cost.

Such policies provide coverage for a portion of any loss in earnings that would occur as the result of disabling injuries or illnesses, helping protect both you and your family financially from an extended period without earnings. While it won’t act as a full safety net, disability income policies provide invaluable financial protection from financial strain.

Also Read : Property Insurance Liability: Your Detailed Guide To Protecting Your Assets


To wrap up, disability insurance is a critical safety net that provides financial support if you’re unable to work due to an illness or injury. It’s important to understand the basics, like the different types of coverage available, how benefits are determined, and the factors affecting premiums. Remember, the right disability insurance can help secure your income and peace of mind during challenging times. It’s wise to consider your needs, research options, and possibly consult a professional to make an informed decision. In short, disability insurance is an essential part of planning for life’s unexpected turns, ensuring that you and your loved ones are protected.


What is disability insurance?

Disability insurance is a type of coverage that provides financial benefits to you if you’re unable to work due to a disabling illness or injury. It’s designed to replace a portion of your income during the period you’re unable to perform your job duties.

Who needs disability insurance?

Anyone who relies on their income to support themselves or their family should consider disability insurance. This is especially important for individuals in professions with a higher risk of physical injury or for those without a significant emergency savings fund.

How does disability insurance work?

If you become disabled and meet the terms of your policy, disability insurance pays a monthly benefit after a specified waiting period. This benefit can be used to cover living expenses, medical bills, and other financial needs. The amount and duration of the benefit depend on the policy’s specifics.

What’s the difference between short-term and long-term disability insurance?

Short-term disability insurance typically covers disabilities lasting a few months, offering benefits that might last from 3 to 6 months. Long-term disability insurance, on the other hand, covers more extended periods of disability, potentially providing benefits for several years or until retirement age.

How do I choose the right disability insurance policy?

When choosing a disability insurance policy, consider factors like the benefit amount, the length of the waiting period before benefits begin, the duration of benefits, and coverage exclusions. It’s also important to compare premiums and check the insurer’s reputation for service and claim handling. Consulting with a financial advisor or insurance specialist can provide personalized advice based on your income, profession, and financial needs.