What happens if you're unable to work due to a major injury or a long illness?

-There is a 1 in 4 chance that a worker will become disabled during their working years (Source: Social Security Administration)
-How long do you think you could maintain your current lifestyle without an income?
-Disability income insurance replaces your income and helps maintain your family's finances.

Why Do I Recommend Disability Insurance to My Clients?

At the age of 22, I was part of a group of ten close-knit friends that had just graduated from college. Bright and eager, we were looking to begin our careers, get married and start families, and otherwise, live long and healthy lives. None of us then had heard anything at all about disability insurance (D.I.).

Alas, little did we know what fate had in store for half of us. The following list, with the actual first names of my friends and their age at the onset of the disabling, fatal illness they incurred, says it all:

Karen, age, 23, cancer; Sharon, age 32, lupus; Murray, age 44, type 1 diabetes; Martin, age 56, Parkinson's; Mark, age 58, type 2 diabetes.

As tragic as the medical prognoses were, the financial ramifications to each individual's family were equally severe. The length of each friend's disability varied from six months to over ten years. The individual's loss of income, hospital costs, home health care, and spouse's lost wages proved to be devastating.

Thus, when I entered the insurance profession over 20 years ago, I resolved to make it my mission to suggest D.I. to each and every one of my clients who could benefit from and protect their income with it.

11 Reasons to Purchase Disability Insurance Before Graduation and Other Important Things

GRADUATION IS JUST MONTHS AWAY! One of the most important financial decisions a physician or dentist can make while still "in training" is to initiate the process to obtain an individual disability policy before graduation.

WHY?

1) Easier Policy Issuance. Carriers want to recruit new policyholders. While you are still in a program, health questions and tests (e.g. blood draw) may be eased; income requirements do not matter and are waived, as residents have restricted incomes. Some firms may even tout their 'guaranteed issuance' of an individual policy if one has had their group policy coverage at med school.
2) Strict Limits on the Amount of DI when Employed. Once you start working at a position, the total amount of coverage is usually limited to 55 - 60 % of a professional's monthly salary. If the employer provides a group policy, it may fill up the quota of allowable coverage, precluding you from securing a large enough individual policy. If you obtain an individual policy before starting a job, the group policy will rest behind that policy, thus allowing one to carry more disability coverage.
3) Individual Policy Verbiage is better. Generally individual policy coverage is stronger and covers more, possibly for a longer time, than a group DI. Your agent should be able to show you the policy differences.
4) Individual coverage is portable from job to job. Employer provided coverage is not portable.
5) Tax Status. Benefits received through employer covered group insurance are taxable. Individual coverage paid for by after-tax dollars is usually tax-free.
6) Discounts. While in training, carriers may offer discounts to residents on their first policy. These are not offered when the doctor is past graduation.
7) Grading, Payment Options and Policy Start Date. Companies offer young doctors 'graded' policies, with rates lower than the level premium option, for a number of years. Also, companies can wait until your job starts for the policy to be officially 'in place' and for you to begin monthly payments, while still holding the 'training' discount open for you. You can also choose the frequency of payment: annually, monthly, quarterly, etc.
8) Future Increase Options. Companies allow you to get a relatively small monthly benefit policy now, which can be increased to a much larger monthly amount in the future , without taking a future physical or answering medical questions. For example, the Guardian may issue a resident physician a $5000 policy now, with a 3X future increase, or $15000, for a total of $20,000 (income permitting, of course). Once you are employed, any FIO's may be limited to 2X the initial policy, or just $10,000 of additional coverage.
9) Real FIO Exercise Dates. Better DI policies let the policyholder purchase policy increases each year on or around the anniversary date. Less favorable policies allow additional coverage to be purchased only every three years; some policies have a "use it or lose it" clause. That is, if the policyholder forgets or is not able that year to purchase additional coverage, then the FIO without a new medical exam or questions is forfeited.
10) Mental, Nervous & Psychological Disability Limitations. Some companies limit their policies' coverage of these conditions to a maximum of 24 months and/or a once-in-a-lifetime occurrence. A policy with this restriction is clearly weaker than one that will pay a benefit for the life of the policy.
11) Financial ratings. Lastly, there is a direct relationship between company financial strength and the ability to pay out future claims, 10, 20 or even 30 years from now. Choose a carrier with a Comdex rating of 90 or higher.

In summary, choose a policy with better policy provisions and definitions from a company with stronger long-term financial strength. Because of the many "moving parts" that DI policies contain, do not buy a policy solely on the basis of price.