Insure Against Loss Of Income If You Are Disabled Due To An Illness Or An Accident

What can you and your family do for income if you are disabled and unable to work as a result of an accident or illness?

The Insurance Information Institute has many items on this topic which can help.

Disability income insurance, which complements health insurance, can replace lost income.  It is not uncommon for people even as young as age 40 to have a long-term (lasting 90 days or more) disability event.  Here are three more common ways to replace income:

1. Employer-paid disability insurance 
   This is required in most states. Most employers provide some short-term sick leave. Many larger employers provide long-term disability coverage as well, typically with benefits of up to 60 percent of salary lasting from five years to age 65, and in some cases extended for life.
2. Social Security disability benefits 
   This can be paid to workers whose disability is expected to last at least 12 months and is so severe that no gainful employment can be performed.
3. Individual disability income insurance policies 
   Other limited replacement income is available for workers under some circumstances from workers compensation (if the injury or illness is job-related), auto insurance (if disability results from an auto accident) and the Department of Veterans Affairs.
4. For many, even those with some employer-paid coverage, an individual disability income policy is the best way to ensure adequate income in the event of disability. When you buy a private disability income policy, you can expect to replace from 50% to 70% of income. Insurers won’t replace all your income because they want you to have an incentive to return to work. However, when you pay the premiums yourself, disability benefits are not taxed. (Benefits from employer-paid policies are subject to income tax.)
5. Auto Insurance Policies may provide lost wage benefits if you purchase the coverage and are injured and cannot work due to a Pennsylvania motor vehicle accident.