9 Reasons You Need Disability Insurance (But Didn’t Know It)

It may be time to consider extra insurance coverage in case you can’t work.

disability insurance
Updated June 6, 2024
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You may have different insurance policies to cover different parts of your life. Perhaps you have car insurance, home insurance, or life insurance to protect yourself and your family.

But what about disability insurance? It may not be an option you’ve considered before, but it could be something you want to add to your insurance portfolio.

If any of these things describe you, you might be a good candidate for disability insurance.

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What is disability insurance?

emiliezhang/Adobe disability insurance claim form

Disability insurance is coverage that helps you pay for different aspects of your life if you become disabled for a variety of reasons during your working years.

A disability insurance policy can give you financial protection if you’re unable to work for an extended time period or if you are no longer able to work. In those cases, your policy will pay for everyday costs and one-time expenses.

How does a policy work?

Rawpixel.com/Adobe disability insurance form

You can access your policy to cover expenses you may incur while temporarily or permanently out of work.

Your disability insurance policy could cover things like credit card bills, car payments, or your mortgage. You also may have other bills and expenses that your insurance can help pay for.

Who should get disability insurance?

Olivier Le Moal/Adobe disability insurance

Different types of people with different issues may make it more important to get insurance.

It’s a good idea to review your budget, savings, and other financial investments to see if you may be one of these types who need insurance.

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You’re the breadwinner

Antonioguillem/Adobe disabled woman on the phone

You may be the sole provider for a family if your spouse is a stay-at-home parent or you’re the only one taking care of elderly parents or family members.

Consider disability insurance if you have someone in your life who depends on your income to make sure bills are paid and purchases can be covered.

You support minors

zinkevych/Adobe father with mobility impairment

Parents with young children should consider disability insurance in case they can no longer work either temporarily or permanently.

You’ll want to consider everyday expenses like food or school supplies as well as other expenses like tuition. Disability insurance could also be important if you’re responsible for child support payments that will need to be covered.

You have a physically demanding job

littlewolf1989/Adobe injury at work

It can be harder to get back to work after a debilitating illness or injury if you have a physically demanding job rather than work in an office job behind a desk. 

So, you’ll want to factor in how much physical work your job requires and what you’ll be limited to if you’re disabled for a period of time.

It’s important to consider any potential worker’s compensation you may receive if you’re injured on your job, but other injuries and illnesses may not be covered if they happen outside your employment.

You have recurring injuries or illnesses

SKT Studio/Adobe farmer with chest pain

You may have recurring back problems or an old injury that still causes you problems. Perhaps you have an illness that can set you back from time to time.

Disability insurance can help you cover your bills when an injury or illness flares up, and you need some time to recover and recuperate.

You’re self-employed

Nina/Adobe tailor working with paper patterns

If you’re self-employed, you don’t have paid vacation days that you can take if you’re injured or sick. You also might have professional expenses in addition to personal expenses that need to be covered even if you can’t work.

If this is your situation, you may want to find a disability policy that can cover all the bills — both for your business and your home life — while you’re unable to work.

You have specialized skills

Kurhan/Adobe male plumber fixing sink

Your job may include specialized skills that can’t be done if you’re disabled for the short or long term. An insurance policy called “own occupation” can cover you even if you can do other work but not your specialty.

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You have debt

Shisu_ka/Adobe man using card to pay bills

You may have debt that you have to pay on a monthly basis, such as a mortgage, car payment, or student loan.

It can be difficult to pay off your debt while you’re disabled or unable to work. Your disability insurance will kick in to cover the costs so you don’t fall behind and get into more debt.

Your employer offers coverage

Zamrznuti tonovi/Adobe businesswoman with disability

Some employers may offer disability coverage as part of their benefits package, which may also include health insurance and a 401(k) match.

Your company may be able to get a group discount for having a large number of employees paying for disability coverage, giving you a cheaper option than if you take out a policy on your own.

You don’t have an emergency fund

Vitalii Vodolazskyi/Adobe savings in emergency fund jar

Emergency funds can be great if you have enough saved to cover unexpected costs like injury or illness, as well as home or car repairs.

Your emergency fund should cover three to six months of expenses. If you don’t have enough saved, it may be a good idea to invest in disability insurance while building your emergency fund.

Bottom line

Courtney H/peopleimages.com/Adobe man hands with insurance documents

Disability insurance could be a good option to prepare yourself financially, depending on how you plan to pay for expenses if you become disabled. But it’s important to weigh the costs with the potential benefits.

You’ll also want to shop around to get the best plan, like you would shop for car insurance, homeowners insurance, or life insurance to make sure you get the best coverage within the limits of your budget.

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Author Details

Jenny Cohen

Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.