Are you healthy, working and feeling like nothing can stop you?  Have you ever considered what would happen to your financial situation if your health took a turn for the worst and you couldn’t work?  Understanding what disability coverage is and how it can protect you is vital to your financial life.  According to the U.S. Social Security Administration, “a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age.”  These are not odds you want to play against, especially not with your financial security.

Disability coverage, also called income protection is a type of insurance that pays out in the event of your inability to work due to health reasons.  Typically you will find disability coverage at work but you can also apply for individual policies and supplemental coverage as well.  Disability coverage is also available through the social security administration, the wait time for approval or denial of applications varies and may take up to several months –during which time you may find it difficult to pay your bills.  Long term disability coverage through work typically covers 60-66% of your compensation.  This is not always to case so check with your human resources department for the details on your specific coverage.

When it comes to disability coverage you may want to consider what your expenses will be in the event of your disability.  These expenses are the necessities of life that basically keeps a roof over your head and food on the table.  You may also want to consider the amount of money you are currently saving for retirement as not all disability policies will cover you for life.  The last bit about having enough coverage is the fact that group coverage may not cover all of your needs.  So be sure to have a professional review your current coverage and get the amount that fits your financial profile.