Disability insurance is offered by numerous insurance companies and is designed to protect workers against financial burdens when they become disabled. Many employers offer disability insurance coverage through a group plan.
If you become disabled and find yourself unable to work, the insurance company is required to pay you disability benefits that are a percentage of your salary. The average employer-based disability plan will cover 60 percent of your salary. An individual plan usually pays more, anywhere from 70 to 80 percent of your salary.
The Council for Disability Awareness estimates that as many as three in 10 workers will become disabled before they retire. You cannot afford to cut corners when it comes to disability insurance.
Always do your homework before purchasing a disability insurance plan. Keep in mind that the lesser expensive policies will not provide as much coverage if you become disabled. Cheaper plans often have stringent guidelines as to what constitutes a disability and how long you can collect disability benefits. Make sure you know what is and is not covered by reading the fine print.