If you wait until you are experiencing health problems to shop for life or disability insurance, you may find that the price is too high or you are no longer insurable. Insuring Your Income A 35-year-old worker who earns $80,000 a year could lose nearly $250,000 during a three-year period of disability, and $2.4 million or more if he or she were permanently disabled. Of course, older or highly paid employees stand to lose muchmore during their peak earning years and may also have higher living expenses to contend with. It could be difficult to support your family if a debilitating injury or chronic illness prevented you fromworking for an extended period of time. Disability income insurance replaces a portion of lost income, up to the policy limits. Benefits may be paid for a specified number of years or until you reach retirement age. Some policies may pay benefits if you cannot work in your current occupation; others might pay only if you cannot work in any type of job. Your employer may offer group disability insurance; if so, it might be wise to take advantage of the coverage. However, group plans tend to offer more limited benefits than individual policies, and you typically would lose your group coverage if you left your employer. Youmay want to purchase an individual disability policy if you are self-employed or your employer does not offer coverage—or to supplement group coverage so that benefit payments more closely match your current income.
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