Disability Insurance for IT Professionals
The IT industry is growing. As society becomes ever more dependent on technology, IT professionals are playing an increasingly important role. Even though the industry job outlook is good, individual IT pros can be forced out of work due to an injury or illness. For this reason, disability insurance for IT professionals is critical.
The IT Sector Outlook
- The U.S. Bureau of Labor Statistics (BLS) says overall employment in computer and information technology occupations is expected to grow by 15% between 2021 and 2031. This is rapid job growth, noticeably outpacing the average projected job growth for all occupations – which is only 5%. Over the period of a decade, approximately 682,800 new jobs will be created in the IT sector.
- IT workers need disability insurance. The BLS says the median annual wage for computer and information technology workers is $97,430, as of May 2021. That’s more than double the median annual wage for all occupations, which is only $45,760. A paycheck like that deserves protection.
- Disability insurance provides paycheck protection. If the policyholder can no longer work due to a covered disability, the policy will pay disability insurance benefits to replace a portion of the policyholder’s pre-disability income. These disability benefits help policyholders avoid financial disaster when they’re unable to earn a paycheck.
IT Work Can Be Demanding
Working at a computer all day may sound easy, but IT professionals do work hard. An illness or injury could interfere with their capability to do their jobs.
The BLS says computer and mathematical occupations require workers to use judgment and make decisions. Disabilities that cause cognitive impairment, as well as prescriptions and treatments that impact cognition, can make it impossible for IT workers to carry out their duties.
Disability can impact IT workers in other ways as well. For example, vision loss can be a serious issue for someone who needs to be able to see a computer screen, whereas illnesses like cancer and stroke can make any type of work impossible.
Disability can impact anyone – IT pros are no exception. They need disability insurance just as much as anyone.
Many IT Workers Have Student Loan Debt
The BLS says a bachelor’s degree is required for 66% of computer and mathematical workers. This means many IT professionals likely have student loan debt. Although some people may be able to have their federal student loans discharged in the case of a total and permanent disability, qualifying is not easy. Many people are stuck with their student loans even if they are unable to work for a prolonged period of time.
Disability insurance can help by providing income during a period of disability. Policyholders can use disability insurance benefits to cover student loan debt as well as other costs. Many disability insurance companies also offer student loan riders that provide extra benefits to cover required student loan payments during a period of disability.
Understanding the Needs of IT Professionals
Some IT professionals work for companies that specialize in delivering IT services, but others work for non-IT companies, covering their IT needs. IT professionals classified as employees may have access to group long-term and group short-term disability insurance through their jobs. However, since not all employers offer these important benefits, IT pros may need to secure individual disability insurance on their own. They may also want supplemental disability insurance that provides portable coverage and robust benefits.
Other IT professionals work as independent contractors. Although they may have more control over their careers and may command an attractive income, they typically lack access to employee benefits. This means they have to buy their own disability insurance.
If you’re an IT professional, consider the following questions. Do you:
- Have disability insurance through work?
- Need more coverage? Disability insurance policies often replace around 60% of the policyholder’s pre-disability income. Although group benefits are usually taxed, individual disability insurance benefits are typically not. You can boost your benefits with supplemental coverage.
- Need a longer benefit period? Short-term disability insurance policies have benefit periods of less than a year – often significantly less – and some group long-term disability insurance policies only provide benefits for two or five years. Disabilities often last longer than these benefit periods.
- Need portable coverage? Group benefits are often tied to a job. If you switch jobs, you may lose your benefits. Since individual disability insurance is portable, you can take it with you when you switch jobs.
Disability Insurance Checklist for IT Pros
Disability insurance companies provide a variety of individual disability insurance options for you to choose from. When comparing coverage options, consider the following elements:
- Definition of Disability: An own-occupation policy provides benefits based on whether the policyholders can perform the duties of their regular jobs, whereas an any-occupation policy provides benefits based on whether the policyholders can perform the duties of any suitable job. Own-occupation policies are attractive because they may pay benefits when any-occupation policies wouldn’t. However, as an own-occupation policy is also more expensive, applicants need to decide whether it’s worth the extra cost.
- Elimination Period: An individual disability insurance policy will not start paying benefits the same day the policyholder experiences a qualifying disability. Rather, the policyholder will have to wait for the elimination period to lapse. Also called the waiting period, a typical elimination period is 90 days. Choosing a policy with a longer waiting period can help you bring your disability insurance premiums down. If you have some savings set aside, this may be a good option.
- Benefit Period: Some disabilities are temporary. For example, you may be diagnosed with cancer and receive disability status while you’re undergoing treatment. After you recover, you’ll be able to return to work. Other disabilities last for much longer and may even be permanent. How long you continue to receive benefits will depend on your policy’s benefit period. Some policies provide benefit periods of two, five, or 10 years; others provide benefits until the policyholder reaches a predetermined retirement age. Although opting for a shorter benefit period may cost less, you should ask yourself what you’ll do if you’re still unable to work when the benefits expire.
- Benefit Amount: The monthly benefit amount you receive will be a portion of your pre-disability income. Check for monthly caps that may reduce this amount, especially if you’re a high earner.
- Portability: Individual disability insurance is portable, which means you can take it with you when you change jobs. Group benefits typically aren’t portable. Furthermore, losing your coverage may you no longer qualify for good rates and terms if you have a pre-existing health condition. It’s important to lock in portable coverage you can keep wherever your career takes you.
- Extra Riders: Riders can provide additional benefits and attractive terms. Choosing the riders that fit your needs is a great way to customize your coverage. For example, if you have a lot of student loan debt, you may want to choose a student loan rider.
Do You Need Disability Insurance for IT Professionals?
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