A journalist colleague’s story prompted me to buy disability insurance

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As the current breadwinner in my home and an independent contractor, the thought of getting disability insurance crossed my mind.

Last year I attended a conference where the main theme is usually to hurry, work hard, and really push yourself to be successful. I was surprised when the closing speech came from a former journalist who thought she was perfectly healthy until she suffered a brain aneurysm. She encouraged many of us participants to slow down and take the time to get our financial affairs in order, including getting proper insurance.

She had to miss work for a year to recover from the aneurysm, but mentioned how grateful she was to have had disability insurance. The insurance benefit helped replace part of her income when she was unable to work for 12 months.

I know that no one’s health or well-being is guaranteed at any age, so this past year I’ve been committed to exploring disability insurance options for myself. Turns out disability insurance is cheaper than I thought and easy to get.

A bit of history on disability insurance

The word insurance often means extra money coming out of my pocket. But most of the time, it’s money well spent to protect an important asset in the event of the unexpected. Homeowners and tenants insurance protects your home.


Car insurance

protects your car. Life insurance protects your loved ones. And disability insurance protects your income if you can’t work for an extended period.

According to the CDC, one in four American adults lives with a disability. However, at least 51% of Americans are without disability coverage, which creates the stressful situation of figuring out how to make ends meet. If I wasn’t able to pay the bills and put food on the table, my first reaction would be to look for work or take a shove. However, when you are disabled or sick, it is not so easy since you may not even be allowed to work.

Disability insurance, both long-term and short-term, protects your source of income if injury or illness limits your ability to work.

Compare disability insurance costs

Getting quotes and comparing costs was most important to me as I already pay for so many different types of insurance. At first I thought disability insurance would be expensive, but it’s actually something I can fit into my budget with no problem.

I heard about Broken, which is an insuretech company that allows you to get a free and fast quote for disability insurance, then apply completely online. A common rule of thumb is to expect to pay 1% to 3% of your gross annual income on disability insurance per year. This means that if you earn $50,000, you could pay between $500 and $1,500 per year.

I like that Breeze gives you options depending on the level of income coverage you want. It only took two minutes to complete the quote form to get these options.

disability insurance options


Broken


Although $1,500 a month of income protection wouldn’t cover all my bills, it would cover most of my mortgage, which is helpful. Since my husband also works, I am not looking for full income replacement. However, I know that losing my income would still cause major financial hardship. Breeze’s quotes seem quite reasonable and even let you choose the length of coverage you prefer.

To get $3,630 a month of disability insurance for five years, I would pay about $47 a month. If I wanted to lock in that coverage until age 65, I could do that for about $74 a month.

breeze insurance options


Broken


I might also add other riders, like the automatic benefit increase rider. This means that for $1 more per month (on average), my monthly benefit will increase by 5% each year. I chose to opt for five-year disability insurance for only $25 per month, and by the end of my term, my benefits will have increased by 20% with this rider.

Does disability insurance replace an emergency fund?

Not in most cases. Remember that disability insurance only covers people with disabilities. Your emergency fund can be used to cover expenses due to any life change.

What interests me the most is the long-term disability insurance, which would give me a lot of financial help if I ever became disabled in any way. I wouldn’t want my family to have to struggle, take out loans, or even lose our house if I couldn’t work.

My emergency fund may meet our short-term needs for a few months, but long-term disability insurance gives me greater peace of mind. Plus, at just $25 per month or $300 per year, it’s not really breaking the bank.

I can think of a lot of much smaller things that I spend $300 a year on, whether it’s eating out, shopping for home decor, or shopping for clothes. Eliminating one of these things during the month or even just buying a few fewer cups of coffee from Starbucks each month can easily help me pay for this much-needed expense.

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About Antoine L. Cassell

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