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The Beginners Guide to Disability Insurance

When you hear the term “Disability Insurance” do you really understand what that means? It is not an insurance policy intended for those who already have a disability – it is protection in the event that you incur a disability that would prevent you from continuing your line of work. This blog we will look at the bare basics of Disability Insurance.

What is Individual Disability Insurance?

Most Americans insure their homes and their vehicles but forget to insure their most important asset: their paycheck. Yet, without a paycheck, homes, vehicles, and other essential things can become unaffordable.

An Individual Disability Insurance (IDI) policy can pay up to 82% of your take-home pay when you become sick or injured. In most cases, these benefits are paid to you on a tax-free basis. Each policy is customized uniquely to fit your needs and claims can last until retirement age. 

When Should I Buy an IDI Policy?

Protecting your income with IDI is a wise choice at any age. It is easier to get coverage when you are young and healthy as premiums increase as you age and develop health conditions. There has never been a better time to apply for IDI. Once you are too sick, you won’t be able to get the protection you need, just as you can’t buy house insurance after your house catches on fire.

Myths Around Disability Insurance:

There are many myths surrounding disability insurance that informs the general public on whether or not they need the policy at all. Is it worth the investment?

MYTH: It Won’t Happen to Me

FACT: Just over 1 in 4 of today’s 20-year-olds will become disabled before they retire.


MYTH: IDI Is Too Expensive

FACT: Only 40% of US households have enough savings to cover at least 3 months of their recurring expenses and 72% of Americans don’t have enough savings to cover bills for 6 months. Disability Insurance is a small investment in ensuring financial stability when the unexpected happens.


MYTH: I Don’t Need IDI Because I Already Have Group LTD

FACT: Supplementing your group LTD with IDI will allow for robust income protection. Here are some more reasons why:

    • Group long-term disability (LTD) insurance typically pays about 60% of your income before taxes, but some group policies come with a monthly benefit cap that leaves high earners underinsured.
    • You may assume your disability benefits won’t be taxed, but if the employer pays the premium, the benefit is typically taxed.
    • If you decide to switch jobs, group LTD is not typically portable.


Contact Us to Purchase An Individual Disability Insurance Policy

So, if you want to get gain some peace of mind and make sure that you and your loved ones are taken care of in the event that you become disabled, contact your local independent insurance agent today.

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