Disability Insurance - Protect Your Income and Lifestyle

Your ability to earn an income is likely your most valuable asset. Main Street Insurance - Patrick Murakami Agency helps Colorado Springs professionals protect their earning power with disability insurance.

What is Disability Insurance?

Disability insurance replaces a portion of your income if you become unable to work due to illness or injury. It's essentially income protection insurance.

Why You Need Disability Insurance

Statistics:

  • 1 in 4 workers will become disabled before retirement

  • Disabilities last an average of 2.5 years

  • Only 39% of Americans have emergency savings for 3+ months

  • 65% of bankruptcies are linked to medical bills and lost income

Without disability insurance:

  • Your income stops

  • Your bills don't

  • Savings get depleted

  • Debt accumulates

  • Retirement accounts get raided

  • Lifestyle drastically changes

Types of Disability Insurance:

Short-Term Disability (STD)

  • Covers disabilities lasting 3-6 months

  • Benefit period: 13-26 weeks typically

  • Elimination period: 0-14 days

  • Replaces 60-70% of income

  • Often provided by employers

  • Covers pregnancy, surgery recovery, temporary injuries

Long-Term Disability (LTD)

  • Covers disabilities lasting months to years

  • Benefit period: 2 years, 5 years, to age 65, or lifetime

  • Elimination period: 90 days, 180 days

  • Replaces 50-70% of income

  • Critical for career-ending disabilities

  • Covers chronic illness, serious injuries, permanent conditions

Key Disability Insurance Features:

Definition of Disability

Own-Occupation:

  • Pays if you can't perform YOUR specific job

  • Best protection for specialized professionals

  • More expensive but worth it

Any-Occupation:

  • Pays only if you can't work ANY job

  • Harder to qualify for benefits

  • Less expensive

Modified Own-Occupation:

  • Pays if you can't do your job

  • Reduces if you earn income doing something else

Benefit Amount

  • Typically 50-70% of gross income

  • Maximum monthly benefits usually $5,000-$20,000

  • Taxable vs. non-taxable benefits matter

Elimination Period (Waiting Period)

  • Time before benefits begin

  • 30, 60, 90, 180, or 365 days

  • Longer elimination = lower premiums

  • Should match your emergency savings

Benefit Period

  • How long benefits pay

  • 2 years, 5 years, to age 65, lifetime

  • Longer benefit period = higher premiums

  • "To age 65" is most common recommendation

Optional Disability Insurance Riders:

Cost of Living Adjustment (COLA)

  • Increases benefits annually with inflation

  • Prevents benefit erosion over time

Residual/Partial Disability

  • Pays if you can work part-time or reduced capacity

  • Proportional benefits based on income loss

Future Increase Option

  • Buy more coverage later without medical underwriting

  • Good for young professionals with rising income

Non-Cancelable and Guaranteed Renewable

  • Insurance company can't cancel or raise rates

  • Premium is locked in

Catastrophic Disability Rider

  • Extra benefit if you're severely disabled

  • Can't perform 2+ activities of daily living

Who Needs Disability Insurance?

Essential if you:

  • Rely on your income to pay bills

  • Are the primary breadwinner

  • Have a mortgage or significant debts

  • Are self-employed or business owner

  • Work in physically demanding job

  • Don't have 6-12 months emergency savings

  • Have dependents

  • Are in your prime earning years

High-Need Professions:

  • Medical professionals (doctors, dentists, surgeons)

  • Attorneys

  • Engineers

  • Skilled tradespeople

  • Business owners

  • Sales professionals

  • Tech professionals

  • Manual laborers

  • Anyone whose career requires specific skills

How Much Does Disability Insurance Cost?

Typical costs:

  • Age 30: $30-60/month per $1,000 of monthly benefit

  • Age 40: $40-80/month per $1,000 of monthly benefit

  • Age 50: $70-120/month per $1,000 of monthly benefit

Example: $5,000/month benefit at age 35 = $200-400/month

Factors affecting cost:

  • Age

  • Gender (women pay more)

  • Occupation risk class

  • Health history

  • Tobacco use

  • Benefit amount

  • Benefit period

  • Elimination period

  • Riders selected

Common Disability Causes:

  • Back injuries and chronic pain

  • Cancer

  • Heart disease

  • Mental health conditions (depression, anxiety)

  • Accidents and injuries

  • Arthritis

  • Diabetes complications

  • Neurological conditions

  • Pregnancy complications

  • Repetitive motion injuries

Disability Insurance vs. Other Options:

Workers' Compensation

  • Only covers on-the-job injuries

  • Doesn't cover illness

  • Limited benefits

  • Complex claims process

Social Security Disability (SSDI)

  • Extremely difficult to qualify

  • Long application process (6-24 months)

  • Must be unable to work ANY job

  • Average benefit: $1,500/month (2024)

  • Not enough for most people

Employer Group Disability

  • Often only covers 60% of income

  • Usually capped at $5,000-10,000/month

  • Benefits are taxable if employer pays premium

  • "Any-occupation" definition common

  • Coverage ends if you leave job

  • Limited or no riders

Individual disability insurance provides better protection with customizable features.

Colorado Springs Considerations:

Active Lifestyles

  • Skiing/snowboarding injuries

  • Mountain biking accidents

  • Hiking injuries

  • Rock climbing risks

Altitude Effects

  • Some health conditions worsen at altitude

  • Heart and respiratory issues

Military Community

  • Service-connected disabilities

  • VA disability doesn't replace full income

  • Private insurance supplements VA benefits

Self-Employed/Small Business

  • No employer coverage

  • Business continues needing your income

  • Overhead expense insurance also available

Get Your Disability Insurance Quote

Protect your income and your family's financial security. Call Main Street Insurance at 719-309-6439 or visit 5214 N Nevada Ave #100 to discuss disability insurance options.

Don't wait until you can't work to realize you needed coverage.

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