The Early Career Disability Insurance Market
Youth may make people feel invincible, but disability can strike at any age. Young workers have disability risks. They also have significant income potential to protect. Locking in affordable coverage is the smart way to secure protection now and in the future.
The Early Career Disability Insurance Market
Youth may make people feel invincible, but disability can strike at any age. Young workers have disability risks. They also have significant income potential to protect. Locking in affordable coverage is the smart way to secure protection now and in the future.
Disability Insurance for Young Workers
Workers in their 20s and 30s may not think about disability insurance, and their insurance agents may not bring it up. Sometimes, this turns out to be a huge oversight. Yes, many people make it through their 20s and 30s without experiencing a long-term disability, but you never know who’s going to be one of the unlucky ones.
A period of disability early in your career – before you have much savings – can bury you under debt. A disability insurance policy protects you against this risk, and because you’re buying coverage while you’re still young and healthy, you can secure affordable rates.
How Young Is Too Young for Disability Insurance?
Anyone who relies on a paycheck can benefit from disability insurance for paycheck protection. In general, a worker who earns at least $50,000 a year is a good candidate for disability insurance, regardless of how young they are.
Disability insurance can be a good fit for:
- College athletes
- Young professionals
- Entrepreneurs and start-up owners
Disability Can Take Many Forms
Disability risk tends to increase with age, but younger individuals are not immune. The following health issues can lead to disability insurance claims among young adults:
- You could injure yourself while scuba diving on vacation, riding a bike, or even getting out of the shower.
- According to the National Cancer Institute, cancer rates are rising among younger people.
- Mental illness. According to the Council for Disability Income Awareness, conditions like anxiety and depression are significant contributors to long-term disability claims.
- Pregnancy complications. Short-term disability can provide coverage for typical pregnancies, but when there are complications, long-term disability coverage may be needed.
The Advantages of Securing Disability Insurance Early in Your Career
Patience isn’t always a virtue. By securing disability insurance early in your career, you can gain two distinct advantages.
- Lock in affordable rates and good coverage terms. As you grow older and develop more health conditions, it’s harder to secure affordable coverage with robust terms. If you lock in coverage early in your career, you can keep those good rates and terms as you age.
- Protect your financial future. An unexpected disability can throw your financial plans off track, but disability insurance can help you recover. You can use the benefit to cover your expenses, and with a student loan rider, you can receive an additional benefit to cover your required student loan payments.
The Student Loan Rider
A student who attends a public university will borrow an average of $31,960 to attain a bachelor’s degree, according to the Education Data Initiative. Individuals who attain advanced degrees may go into even greater debt.
Young adults invest in their education because they believe it will pay off in a good career, but if a disability prevents them from working, they won’t see the return they expected. Although it is possible to discharge federal debt in cases of total and permanent disability, many people who are unable to work for a period of time do not qualify for this relief. Borrowers may be unable to pay, while their level of debt can keep mounting due to accumulated interest.
A disability insurance policy with a student loan rider offers another solution. During periods of disability, the rider pays an additional benefit to cover student loan payments, up to the benefit limit.
Protecting Income Growth with the Future Purchase Option
As your career progresses, your income will likely increase. With the future purchase option, your disability insurance coverage can keep up.
The future purchase option rider lets policyholders increase their disability insurance coverage each year to reflect increases in their income, without the need for additional medical underwriting. By leveraging this clause, young workers can secure paycheck protection without worrying about outgrowing their policy.
Budget-Sensitive Disability Insurance Options
Early career workers may be very price sensitive. They’re earning enough to benefit from paycheck protection, but they don’t necessarily have a lot of cash left over each month.
By buying coverage when they are still young and healthy, they’ll be able to secure good rates that make disability insurance more affordable. They can also look for a bare-bones policy that provides just enough coverage for basic necessities without any unnecessary riders that increase the cost of disability insurance. For example, many workers don’t really need non-cancelable and guaranteed renewable policies or own-occupation coverage, and adding these riders can make coverage unaffordable for budget-sensitive workers.
Do You Need Disability Insurance?
If you’re trying to decide whether disability insurance is right for yourself or a client, ask the following questions:
- How would you make ends meet if you couldn’t work? If you don’t have a good answer, disability insurance could be a smart move.
- Do you have debt you need to pay off? Disability insurance can help you keep up with payments and avoid taking on more debt. Consider the student loan rider if you have student loan debt.
- Will you want coverage in the future? Consider buying now so you can lock in good rates.
Are You Ready to Serve the Early Career Disability Insurance Market?
If you’re a young worker, an insurance agent can help you find coverage. Find an agent.
Are You an Insurance Agent?
If you’re an insurance agent, DIS can help you serve the early career market. Get a quote.
The following resources can help agents master the disability insurance for the early career market.
The Implications of Income Loss Infographic
