Disability Insurance for Nurses
Nurses take care of patients, but they also need to take care of their financial futures. Disability insurance for nurses provides important paycheck protection.
There are a lot of nurses in the U.S., all of whom could probably all benefit from disability insurance.
According to the U.S. Bureau of Labor Statistics (BLS), there are 3,130,600 registered nurses. Between 2021 and 2031, the number of nursing jobs is expected to grow by 6%, creating an additional 195,400 nursing jobs over the decade.
Nurses work in a variety of environments – 60% work in hospitals, 18% in ambulatory healthcare services (such as physicians’ offices, home health care, and outpatient care centers), and 6% in nursing and residential care facilities.
The Average Nurse Salary
- Since nurses typically earn a good income, it makes sense for them to protect their paychecks with disability insurance.
- The BLS says registered nurses earned a median annual salary of $77,600 in 2021 – and some nurses earn significantly more. For example, the BLS says nurse anesthetists, nurse midwives, and nurse practitioners earned an average annual salary of $123,780 in 2021.
- Traveling nurses can also command large paychecks. During the COVID-19 pandemic, demand for traveling nurses spiked, which caused wages to increase. Fortune says traveling nurse salaries have stabilized at around $3,000 per week as of 2023.
Nursing Education and Student Loan Debt
Before you can become a nurse, it’s necessary to earn a nursing degree and license. As a result, many nurses have student loan debt.
The BLS says registered nurses need a diploma from an approved nursing program, an associate degree in nursing, or a bachelor’s degree in nursing. Nurse anesthetists, nurse midwives, and nurse practitioners need a master’s degree in their specialty.
According to Nerd Wallet, the average student loan debt is $19,928 for nurses who have an associate degree, $23,711 for nurses with a bachelor’s degree, and $47,321 for nurses with a master’s degree. The average monthly payment for a nurse with a master’s degree is $544.
As long as nurses can keep working, they may expect to be able to manage their student loan debt. Since nurses are in high demand, they might not be worried about their debt. However, they are still at risk. Temporary and permanent disabilities can prevent nurses from working, rendering them unable to pay their student loan bills. Paying for other expenses – including rent or mortgage, utilities, and groceries – also becomes a problem.
With so many financial obligations, nurses can run through any savings they have fast. Disability insurance can provide monthly benefits during periods of disability, helping nurses make ends meet.
Nursing Is a Demanding Field
Nurses work hard. The BLS says nurses often spend a lot of time walking, bending, stretching, and standing. They may have to lift and move patients, which can leave them vulnerable to injuries.
When nurses are injured on the job, they usually qualify for workers’ compensation benefits. But what happens when a nurse is injured outside of work? If a nurse is injured on a skiing vacation, while riding a bike, or after even slipping on some ice, he or she may be unable to carry out the demanding tasks that are required of a nurse. Since the injury isn’t work related, workers’ compensation doesn’t apply. In scenarios like this, nurses are grateful for disability insurance coverage.
Illnesses like cancer and stroke can also prevent nurses from working. In addition to exhaustion, weakness, and other physical symptoms, some illnesses and their treatments can cause mental impairment and brain fog. For nurses, mistakes can be a matter of life and death, meaning they may not be able to work if they’re experiencing cognitive impairment.
Nurses see the reality of illness and injury every day – and they’re not immune to experiencing it themselves. In fact, the Social Security Administration says around one in four 20-year-olds will become disabled before reaching retirement age. Disability insurance provides financial protection against this risk.
Types of Disability Insurance for Nurses
Disability insurance provides a monthly benefit during qualifying periods of disability. However, there are different types of disability insurance policies.
- Employers often offer group short-term disability insurance as a job-based benefit. It can provide benefits for short periods of time, such as three months or six months, but it never covers a period of more than one year. This provides good coverage for things like broken bones and pregnancy, but it doesn’t provide sufficient coverage for disabilities that last for longer periods.
- Employers may also offer group long-term disability insurance as a job-based benefit. It can provide benefits for longer periods of time. However, it may only replace around 60% of your income and the benefits are typically subject to income tax. Furthermore, the benefits are usually tied to a job, meaning you lose coverage if you switch jobs. For more extensive coverage, consider supplementing your group disability insurance policy with individual disability insurance.
- Individual disability insurance is available for purchase by the individual. It offers robust and flexible coverage, and the benefits are not typically subject to income tax. Additionally, individual disability insurance is portable, meaning you can keep it when you switch jobs.
- Guaranteed standard issue (GSI) disability insurance is a good option for groups of five or more employees. As well as nurses, such groups can include doctors and other employees with the same employer. GSI has streamlined underwriting with few or no medical underwriting requirements and usually comes with a multi-life discount.
The Disability Insurance for Nurses Checklist
When purchasing disability insurance for nurses, pay attention to the following features:
- Definition of Disability: An any-occupation policy pays benefits if a disability prevents you from working in any job, whereas an own-occupation policy pays benefits if a disability prevents you from working in your normal job (i.e., as a nurse).
- Benefit Period: Some disability insurance policies have maximum benefit periods of a set number of years, such as two, five, or 10 years. Other disability insurance policies have benefit periods that don’t end until the policyholder reaches retirement age.
- Elimination Period: After experiencing a disability, the policyholder will have to wait for the elimination period to lapse before the policy will pay benefits. A policy with a longer elimination period may have a less expensive premium, and vice versa.
- Portability: Group disability insurance policies aren’t typically portable, but individual disability insurance policies are.
- Benefit Amount: Disability insurance benefits replace a percentage of the policyholder’s pre-disability income. However, high earners (typically those earning above $100,000 a year) also need to watch for benefit caps that can reduce the amount of money they receive.
- Riders: You can add riders to individual disability insurance policies to receive additional benefits. For example, a nurse with student loan debt may want a student loan rider to help with student loan payments during a period of disability.
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