Disability Insurance - Is it Worth the Cost?

Depending on your lifestyle and financial situation, disability insurance may cost more than it is worth. However, if you are one of the many individuals who is at high risk of disability and faces extreme consequences should disability occur, it is important to provide yourself with security through disability insurance. Consider these factors when you are deciding whether to purchase insurance and how much to buy.

High Risk Industry

Individuals who work in field involving manual labor are exposed to two risks when it comes to disability. First, they are more likely to become ill or injured in their workplace. Second, if illness or injury should temporarily or permanently disable someone in this field, that person would not be able to continue earning a salary. For example, a person who works in landscaping would lose her earning power if she were to injure her back in a car accident. If the same individual worked behind a desk all day, she would be able to continue earning even after her injury. Ask yourself whether or not your physical health and abilities affect your job. If so, the cost of disability insurance will be well-worth the price if you were to become disabled.

Jobless Benefits

If you have the luxury of working for an employer with a high amount of jobless benefits, you may not need to purchase private disability insurance. For example, many employers offer long-term and short-term disability benefits as part of a health care package. Purchasing through your employer will save you money due to group rates. If you do not have this option, it is important to consider purchasing insurance independently.

Liquid Savings

Short-term disability insurance is more often used than long-term disability insurance. While the likelihood you will be permanently disabled is low, the likelihood you will require a surgery, become ill or sustain a major injury is much higher. If you are temporarily unable to work, you may rely on your savings to help you through the emergency. An individual with at least three months salary in liquid savings can overcome most emergencies. A person with a lower income, though, who has been unable to save sufficiently may find a much more dangerous scenario if he or she is unable to work for a limited period of time. Disability insurance is a good idea if you do not have a security blanket of emergency funds.


Perhaps the greatest factor affecting whether you should secure disability insurance is whether or not you have responsibilities to dependents. If you would like to take the risk for yourself, that is your decision. However, if you are injured and cannot continue to supply a healthy situation for your dependents, you are placing those individuals at a large risk. For example, your children may be removed from your home to a situation where they can receive care if you are no longer able to provide it. For this reason, a person who is the primary bread-winner for a family needs to be more concerned with disability insurance than a person who is single or a secondary income earner.

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