Some companies have group disability plans and there is also the possibility of applying for Social Security Disability Insurance, but most people are turned down by the Social Security Administration. What is covered under a company’s plan may not be enough to cover the expenses. Workers have another alternative and it is called income insurance.
Income insurance provides a portion of the salary that people earn during the time that they cannot work. The importance of having income insurance cannot be stressed enough, because of the high probability that people have of becoming temporarily unable to work because of an illness or injury. The National Association of Insurance Commissioners (NAIC) has found that by the time a male reaches the age of 35 he has a 20% chance of being sidelined by an illness or injury for more than three months. Similarly, a female of the same age has a 33% chance of the same event occurring.
The consequences of workers losing their salaries are many and they can last into the future. During the time that these workers cannot return to their jobs, they still have to pay the everyday expenses. They also may have medical bills to pay which increases the amount of money that they expend each month. Without income insurance, these workers may have to use their savings to survive. The detrimental effect this would have on their future would be a decrease in their ability to save for retirement.
It may be possible that an employer’s group plan or the government’s disability plan is not enough to cover the everyday expenses as well as the medical costs.
Workers that have income insurance, which is a private insurance policy, will have even more coverage with which they can supplement other disability plans. Income insurance is similar to life insurance in how people determine the amount they need to purchase.
With income insurance, the worker’s salary is taken into consideration. Workers list their monthly expenses and consider the fact that they may need to hire people to perform the duties that they currently do for themselves. It also helps to know how much they may receive from their employers’ plans or from Social Security. Knowing how much they will receive from these two different programs will give them an idea of how much income insurance they will need.