I’m more than a little fanatical about my health. I go to the gym, not out of some guilt-ridden obligation to work off the donuts I ate for breakfast, but because I legitimately love lifting heavy things, jumping on boxes, and feeling the burn. I drink almond milk. I own a juicer. If you were to snoop in my medicine cabinet (have you no shame?), you’d find a neat row of vitamins, from my everyday multi-vitamin to fish oil pills.
In other words, I protect my health as much as I can, but I still signed on the dotted line last month and became the proud owner of my very own disability insurance policy. My insurance agent shook my hand and helpfully said, “I hope I just sold you the biggest waste of money you’ll ever spend.”
I hope so too, but the reason I agreed to pay good money for something I might never use is … because if I ever do need to use it, that disability insurance could save my financial life.
Why Disability Insurance
For all the ways I try and take care of my body, I’m not afraid to put it in a little danger every so often. I love competing on obstacle course races, which often involves clamoring over walls, swinging on ropes, and churning down muddy hills. I CrossFit, which involves throwing up barbells loaded with more than my body weight over my head. I also do something else that has been proven time and time again to be dangerous – I drive. Heck, I could get cancer tomorrow and face months of debilitating chemo. All it would take is one bad fall, one bad lift, one drunk driver, one strange lump and I could be out of commission for a long time. As a self-employed freelance writer, if I don’t work I don’t eat.
The scary thing is that, at least according to the numbers, there is a real chance that I may face a disability sometime in my future. According to the Social Security Administration, one in four people will become disabled before reaching retirement. Let that sink in. One in four.
Many people understand that it’s important to buy life insurance, especially if they are the primary breadwinner and/or if they have children. What many don’t realize is that, according to at least one statistic I found, a person who is 30 – 35 years old (which happens to be my age bracket) is four times more likely to become disabled before age 65 than to die.
Should You Get Disability Insurance?
You might not think you need disability insurance, because if the worst were to happen, then the U.S. government would swoop in and rescue you. Yes, the government does pay disability benefits to those who become severely disabled, but their standards for what is classified as a disability are often much stricter than what you can get with a private disability policy. Mine, for example, allows me to receive payments if I am too disabled to perform my work. So, if I get severe carpal tunnel syndrome, I might still be able to putter around and be productive, but it’d be pretty hard to type all day long on a computer. The government might not consider me disabled, but I’d have a good shot at getting benefits from my policy.
There’s also the fact that the average Social Security disability payout in 2017 is $1,171. Here in San Diego where I live, that wouldn’t even come close to paying the average monthly home mortgage, much less cover groceries, gas, and other essentials. Also, entitlement programs are always at risk when politicians start focusing on balancing the budget. Relying on the government is not a solid game plan in my book.
If you get disability coverage at your work, that’s great. I’d encourage you to look carefully at your policy. How much would you get if you became disabled? Is your policy long-term, or does it only cover a certain amount of time? What happens if you lose your job?
I’m not saying that you definitely need to go out and buy disability insurance right this minute. What I’m saying is that I chose to invest in disability insurance because I can’t predict the future, but I can be prepared. My policy isn’t the greatest thing in the universe, but for a reasonable monthly fee, I will get enough so that I can cover my primary expenses if I should ever need it. To save money, my policy includes a 90-day wait period, which is why having an emergency savings fund is so important! One thing I like about my policy is that the benefit can increase over time if my income increases (cross your fingers for me). The policy grows with me and my lifestyle. (Gold plated bathtub, here I come!)
If you are barely making ends meet right now, then focus first on building up your emergency savings account (here’s how you can get started building your emergency savings fund). Next, if you don’t have health insurance, make that your first insurance priority. Once you comfortably have money stockpiled in savings and feel on top of your health insurance costs, consider disability insurance.
As my insurance agent said to me, I hope that disability insurance will be the biggest waste of money you ever spend…but you should still buy it if you can!