Some financial advisors do not focus on disability insurance when discussing planning with their clients. In fact, many adults don't take the risk of becoming disabled seriously. With a one-in-three chance that a middle-aged adult will become disabled at some point in their life, individuals, especially doctors, cannot afford to ignore disability insurance. Fewer than 40% of Social Security Disability claims are approved due to strict legal requirements, and benefits are typically less than $1000 a month. Most employer-provided group policies only pay employees 60% of their lost wages, before taxes, which actually equals about 45% of gross pay. A person out of work on a disability could end up with unpaid bills and mounting debt.
To offset Social Security and employer-based plans, it's imperative that individuals purchase supplemental disability insurance. As with all personal insurance plans, the best time to purchase disability insurance is when you are young and your health is good. Insurance policies can be complex, so buyers should investigate rules on waiting periods and policy limitations on mental disabilities, pregnancy, and hard-to-diagnose conditions like chronic fatigue syndrome. Contact your financial advisor to see how disability insurance fits into your financial plan