Disability insurance is a type of insurance that protects an individual’s earned income against the risks of illness and/or accidents that could affect their ability to continue to pay living expenses.

It was first made available in England in 1848, and has expanded since then to include individual, group, and business overhead types of policies.

Generally, a disability is commonly defined as an inability to perform the material and substantial duties of one’s job coupled with a loss of income of 20 per cent (or one day per week) compared to pre-disability earnings.

“The chances of becoming disabled are far higher than most people realize,” says John Carney of Carney Cargill Insurance. “Men in the United States have a 43 per cent chance of becoming seriously disabled during their working years, while women have an even higher chance of 54 per cent.”

Put another way, just over 1 in 4 of today’s 20-year-olds will become disabled before they retire, according to the Council for Disability Awareness.

Accidents are not usually the culprit in these cases – back injuries, pregnancy, cancer, heart disease and other illnesses cause the majority of long-term disability cases. Behavioral health conditions can be considered disabilities as well. In fact, Prudential Life Insurance Company has calculated that behavioral health disabilities are likely to be among the leading causes of disability by 2030.

In this same vein, people can have disabilities that are not readily evident to others – for example, the dentist who experiences numbness in his or her fingers from carpel tunnel syndrome.

The majority of Americans have not thought through the implications of a disability and the severe financial consequences that would occur. On average, an individual would need emergency savings to last 34.6 months, which constitutes a long-term disability claim in the U.S.

Disability insurance is relatively easy to obtain, and the cost for a comprehensive policy is normally about one to three per cent of income, and you may be able to become insured even if you have a medical pre-existing condition.

However, the most important factor in obtaining disability coverage is – to do it now.

Find Carney-Cargill, Inc. at 600 Ericksen Ave. NE, Suite 320, Bainbridge Island. For more information, call 206-842-8987 or visit carneycargill.com.

Johnathan N. Carney is President of Carney-Cargill, Inc., experts in employee benefits, life, disability, long-term care insurance and estate planning.