Updated July 1st, 2025

Most individuals are diligent about insuring their homes, possessions, vehicles, and lives. However, there’s one critical asset that often goes overlooked: your ability to earn an income. This capability might be your most important investment. For instance, if you earn 50,000 a year and are 35 years old, you stand to earn approximately 1.5 million by the time you reach 65, assuming your income remains stagnant, which is unlikely.

Why Should You Insure Your Income?

It’s essential to consider whether your primary income—potentially worth $1.5 million—deserves protection. After all, do your house or car hold the same monetary value? For most of us, the answer is no.

The Reality of Disability

When discussing disability insurance, many people instinctively think of accidents. However, the reality is that a significant portion of long-term disabilities stem from illnesses such as heart disease and cancer. In the United States, over 12% of adults experience a long-term disability annually.

Moreover, statistics reveal that 1 in 7 employed Americans will endure a disability lasting five years or longer before reaching 65. The likelihood of facing a disability that persists for at least three months exceeds 50%. Alarmingly, the U.S. Department of Housing and Urban Development reports that 45% of foreclosures are linked to disability.

The Limitations of Social Security

Social Security can provide assistance in the event of a disability, but qualifying for these benefits can be a complicated process. The financial support offered through Social Security is often limited, making it insufficient for those with basic living expenses.

How to Secure Disability Insurance

Disability insurance is crucial to safeguarding your income. Large employers typically offer short-term and long-term disability insurance, which can be affordable and cover 50-60% of your salary. However, these payouts may be capped, potentially leaving you financially vulnerable if you were to rely solely on employer-driven coverage.

For those who need more personalized protection, individual disability insurance policies are available. While these can be pricier, they often provide greater flexibility to meet your specific needs. On average, you can expect to pay between 1-3% of your salary annually to ensure coverage that replaces 60% of your income.

Factors Influencing Your Premium

Several elements will influence the cost of your disability insurance policy:

1. Monthly Payout: The greater the payout in the event of a disability, the higher your premium.
2. Definition of Disability: Understand how "disability" is defined by your policy. Will you receive benefits if you're unable to perform your specific job, or does it extend to any job you're qualified to do? If you can work part-time or do alternative work, does that affect your coverage?
3. Waiting Period: The duration before benefits commence impacts premium costs. Policies with longer waiting periods tend to be less expensive. Consider establishing a cash reserve of 4-6 months to prepare for unexpected situations.
4. Occupation: Riskier jobs typically incur higher premiums. For example, a construction worker will likely pay more than an office worker due to the inherent risks involved.
5. Cost of Living Adjustments: Some policies include adjustments for inflation, which is crucial if the disability lasts for an extended period.
6. Additional Purchase Options: Many policies allow you to purchase additional coverage in the future without undergoing another health evaluation, giving you peace of mind as your career progresses.

Conclusion: Don’t Leave Your Future to Chance

Disability insurance is often the most overlooked type of insurance—especially among self-employed individuals. As your ability to earn an income is fundamental to your financial stability, ensuring its protection should be a top priority.

Take the proactive step to secure your financial future. Click HERE to book your free consultation on disability insurance today. Your well-being and your family's future may depend on it!