Disability insurance can replace your income if you're injured or too sick to work, but not everyone needs it

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  • Disability insurance can help replace lost income if you can't work due to an injury or chronic illness.
  • If you support a spouse or dependents and rely on a steady paycheck to pay regular bills or stay on track financially, then you probably need disability insurance.
  • You may already have disability insurance through your employer - or perhaps you're relying on Social Security to pick up the tab - but that's probably not enough coverage.
  • Long-term disability insurance is the most comprehensive and cost-effective option for most working professionals.
  • Compare policies and prices to find the right disability coverage for you with Policygenius »

More than one in four Americans will experience a disability during their career that keeps them from working for at least a year, according to the Social Security Administration. Those chances are high, but disability insurance can help lessen the financial burden.

If you support anyone - children, a spouse, or otherwise - and rely on a steady paycheck to pay regular bills or stay on track financially, you probably need disability insurance, explains insurance-comparison site Policygenius. In exchange for a monthly premium, life insurance is there to provide for your dependents in your total absence; disability insurance helps replace your income if you're physically or mentally disabled and cannot go to work.

As Policygenius explains, for people whose career is their largest financial asset, buying disability insurance is a no-brainer. Despite popular belief, it's not just for on-the-job injuries. In fact, the most common disability insurance claims after work-induced musculoskeletal disorders (think: carpal tunnel, tendinitis, and back pain) are for cancer, pregnancy, and mental-health issues like depression and anxiety.

If you have a traditional job, you may already have disability insurance through your employer - or perhaps you're relying on Social Security to pick up the tab - but that's probably not enough coverage. Most employers offer short-term disability insurance, which usually only replaces up to 50% of your income for about three to six months, plus you'll have to pay taxes on the payments. Also, these policies are contingent on your employment with the company.

As for Social Security Disability Insurance (SSDI), the process for qualifying as disabled and getting approved for benefits is notoriously lengthy and difficult to penetrate. And even those who do get approved for benefits after months of consideration will usually receive but a fraction of the payments they could get from a private policy.

Experts recommend long-term disability insurance for expanded coverage

All things considered, Policygenius experts recommend buying long-term disability insurance for the most "comprehensive and cost-effective" coverage. Long-term disability insurance can effectively pick up where short-term coverage or your emergency fund leave off.

The premiums for long-term disability policies are similar to short-term policies - around 1% to 3% of your annual pretax salary - but the payouts are typically bigger and tax free, plus the benefit period can last decades, and even up until retirement. You can also pay extra for specific policies, such as "own occupation," which stipulates that you will still receive full benefit payments even if you're able to work, albeit at a different job.

With long-term disability insurance, you're responsible for choosing your coverage amount - the rule of thumb is around 60% of your gross salary; how long your payments will last, called the benefit period; and the waiting or elimination period, which is how long you have to wait until your insurance payments kick in. All of these factors will affect how much you pay each month to keep your policy active, according to Policygenius.

Your age, location, health history, and occupation will also have an impact on your premium cost. As such, the longer you wait to buy disability insurance, the more expensive it becomes.

Policygenius can help you compare policies and prices to find the right disability insurance for you »

Related coverage from How to Do Everything: Money

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