Many people wonder if disability insurance is necessary. After all, the Social Security Administration does provide a safety net – disability benefits – to those who become unable to work due to physical or mental disability. However, for many people, social security checks will not cover the financial needs created by an inability to work.
In 2013, the average Social Security Disability Insurance payment was $1,132 per month. The highest monthly payout was a mere $2,533. Imagine that you are unable to work and, instead of your typical monthly paycheck, you are collecting $1,132 per month in social security payments. Would you be able to pay your bills and maintain your current style of living? If not, disability insurance may be something to consider.
If you determine that disability insurance is necessary to protect your family in the event of your inability to work, check whether your employer provides a disability insurance plan. Employer-provided plans are often the most cost-effective. If your employer does not offer a plan, you can purchase a private policy. Private policies are beneficial because they often offer larger benefits than those provided by an employer. Moreover, you can retain your private policy if you switch jobs.
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