Most of my clients worry about their family’s welfare in the event of their death, but many don’t consider what could happen if they were to become disabled. The very best advice I can give when it comes to disability insurance is to get it when you’re young, as that is when you are the most attractive candidate for a policy. Unfortunately, too many people ignore this advice.

One of my favorite tools is this disability insurance needs calculator. It is a great worksheet that can help determine the amount of insurance you would need to replace your income in order to sustain your household if you became disabled and could no longer work.

Self-employed people and those who do not qualify for employer-sponsored benefits may want to purchase disability insurance through a broker. Be aware, however, that an employer-sponsored plan and an individual plan can be very different.

Individual disability insurance plans

Buying an individual disability insurance plan can be tricky and expensive, and this type of insurance depends on many variables, including:

  • Health – Underwriters review doctors’ records to determine an applicant’s health.
  • Gender – Women are more expensive than men when it comes to disability insurance.
  • Age – Disability insurance is only payable to age 65.
  • Occupation – Some job classifications are more expensive than others, and some are just uninsurable. For example, contractors are a higher risk to insure than accountants.
  • Reported income – Most carriers do not insure more than 60 percent to 70 percent of your reported income. It’s considered a moral hazard for a company to insure 100 percent of your income. This is because such coverage would mean it would be more attractive to be disabled and collect all of your current income level than to work for a living.

Alternatives to disability insurance

If your occupation precludes you from securing an individual policy in the open market, you may want to consider enrolling yourself in a state-mandated workers’ compensation and disability plan. This type of policy is required to be paid when your employer has W2 employees. If you have no other insurance coverage, this will help to provide some protection to pay the bills that do not go away when you are disabled.

Social Security disability is another option, but even if you qualify, you must go through an arduous process that takes an extraordinary amount of time before you start receiving checks. It’s unfortunately not a very viable course of action for most people.

Discuss your employment and disability considerations with your broker, and ask how much insurance you need and how much you can afford. Your family will thank you, and so will your wallet—and your credit score.

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Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.

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