Disability income insurance is a supplemental policy that protects policyholders from losing their income if they cannot work due to illness or an accident. Government-sponsored programs, private employer-sponsored groups, and personal individual disability income policies are types of disability income insurance. Therefore, this essay discusses the benefits and drawbacks of getting disability income insurance. In summary, it can be evident that the benefits outnumber the disadvantages. The benefits of disability income insurance include the possibility for persons who cannot work due to illness to get disability insurance as a source of income. Contrary, it is critical to comprehend the drawbacks of disability insurance since an individual has to contend with the waiting period for compensation, which is anything between one month to three months.
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With disability insurance, individuals can get a more comprehensive set of income protection intended to replace a significant percentage of income when sickness prevents them from working. In addition, insurance helps to pay ordinary monthly expenses while a person is healing. A lengthy disability can be devastating to a worker and his or her family. Hence, one can avoid unwanted situations like foreclosures and the prospect of bankruptcy by having insurance. On the other hand, the disadvantage of disability insurance is that individuals have to contend with the waiting period, which is anything between one month to three months (Low, & Pistaferri, 2020). During this period, an individual has to dig in personal savings to provide for the household’s needs.
In conclusion, it can be evident that the pros outweigh the cons since individuals can get more comprehensive protection designed to replace a significant portion of injury that prevents a person from earning a living. Furthermore, during their recovery from a handicap, a client can receive additional money to spend on other necessities such as therapies or prescriptions. Due to an accident or sickness, people who cannot work might receive disability insurance as a source of income.
Low H., & Pistaferri L. (2020). Disability insurance: Theoretical trade-offs and empirical evidence, The Journal of Applied Economics, 41(1), 129-164. Web.