Disability Income Insurance

First, a bit on Social Security Disability Insurance. If you have been paying into the Social Security system via payroll taxes, you may be eligible for full Social Security Administration (SSA) Disability Insurance. If you are not vested in SSA, you may still qualify for something called SSI, albeit a small token of monthly income.

In order to qualify for full SSA disability insurance you have to be disabled enough to not be able to earn a "substantial" amount of income. This "substantial" amount is $864 a month. Further your disability has to be expected to last for a year or longer. You also have to be totally disabled as there are no partial disability benefits. Applying for SSA disability is a rather easy process; getting turned down is even easier. The SSA has a great website and can provide further information, see www.SSA.gov.

State Disability Pools

All states have a short-term disability pools, again, funded with payroll taxes. Maximum benefits may be a few hundred dollars a week with short benefit periods.

Individually Owned, or Corporate Provided Long Term Disability Insurance

Your chances of being disabled are greater then your chances of dying. It is imperative that you carry individual disability insurance that covers up to 60%, or more, of your regular monthly income with benefit periods that go to age 65. Many employers offer such benefits on a voluntary basis; otherwise you need to turn to the individual disability insurance marketplace. Disability insurance differs greatly from one insurance company to the next. Features and benefits vary wildly, so make sure you obtain many quotes.

What you want to watch out for are two critical elements, 1) The definition of disability, and 2) you want what is called "Non-cancelable, guaranteed renewable" disability insurance. The latter means that the insurance company can't just outright cancel your policy, nor can they arbitrarily increase your premiums as the years go by.

Also, stick with brand name insurance companies. Many insurance companies lost so much money with their disability insurance portfolios that they exited the marketplace and left policyholders stranded.

Lastly, if you are going to buy any disability insurance policy, let us review the specimen contracts and let us do your comparative quote shopping for you. It is well worth the consulting fee to obtain the best possible coverage.