Did you know that you will likely use disability insurance before you’ll use life insurance?  The reason for this is because if you work you are more likely to become disabled than you are to die. Disability insurance is necessary if you have children or if you rely on your income to pay the bills. If you were to become disabled tomorrow, who would pay your bills?

Unfortunately, not enough people realize that their chances of becoming disabled are greater than their chances of dying prematurely. Yet they are more likely to buy life insurance than disability insurance. According to statistics from the Journal of the American Society of Chartered Life Underwriters, if you are age thirty to fifty-five, your chances of becoming disabled are two to three times greater than your chances of dying.  If more people knew this, more people would buy disability insurance, no doubt!

Are you assuming that the government will pay for you if you become disabled? Did you know that more than 80% of the people who apply for Social Security disability benefits are rejected? Social Security does not pay benefits for partial or short-term disability. Your disability has to either last a year or be expected to last a year before you can collect Social Security. Worker's Compensation pays only if you were injured on the job and benefits are often limited to a few years.  As you can see, this will not pay your bills, you do need disability insurance.

Even health insurance is not enough, as it will not pay your bills.   Long-term care insurance only covers bills from nursing homes or assisted care center. Disability insurance, however, does not pay bills. Instead the insurance company gives you money on a regular basis. It is designed to replace your salary so that you and your family will not experience financial hardship during any period when you are too sick or injured to work.

Wondering what should you look for when you are buying long term disability insurance? First, the insurance company itself should have a top rating from Moody's, A.M. Best, and Standard and Poor. These agencies rate companies in terms of capitalization, growth, earnings and other indicators of financial stability.  In addition, you should make sure you understand the terms of your policy. Some policies require a waiting period before you start receiving benefits.

As you can see, disability insurance policies can be confusing. It is always best to sit down with a professional insurance agent to discuss the terms of the policy together and to ask questions until you completely understand the details of the policy quotes being presented.  Disability insurance should be considered mandatory, but that doesn’t mean it is one size fits all.