Disability Income Insurance

Often the most needed and most overlooked type of protection

Paycheck protection

A serious illness or injury can harm more than your health—it can have an impact on your ability to work and meet your family's living expenses. Disability income insurance helps you pay living expenses while you're unable to work. It offers paycheck protection—providing cash directly to you for spending on a mortgage or rent, groceries, utility bills, car payments, or whatever else you choose.

Assistance to return to work

A policy also can pay for training or other assistance you may need to return to work. With disability income insurance, you can avoid depleting the savings you may have accumulated for your children's education or your retirement.

The first step in determining whether long-term disability income insurance is right for you is to evaluate the benefits you may already be eligible to receive from your employer, the government, or other programs. Once you've decided to purchase a policy, speak with an insurance agent who can outline the various policies and benefits available to you.

How your policy defines "disability"

One of the most important things to examine in a disability income policy is exactly how the word "disability" is defined. Some policies pay benefits only if you are unable to complete the duties of any occupation for which you're reasonably qualified by training, experience, and education. Others pay benefits if you're unable to perform the major duties of your own occupation.

Ask for outlines of coverage so you can compare the features of several policies. Make sure you fully understand any policy you are considering—a policy that does not provide the protection you need is not a good buy.

Features to look for in a policy include:

• Benefit amount
• Elimination period (waiting period before benefits begin)
• Length of benefit period
• Benefits for partial disability
• Recurrent disability (relapse provision)
• Cost-of-living adjustments or the right to purchase additional coverage

The American Council of Life Insurers (ACLI) has prepared a guide for evaluating disability insurance.

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