Jamie JohnsonBy Jamie Johnson, WCI Contributor

Disability insurance is the best way to protect your income if you’re unable to work due to an illness or injury. It’s necessary coverage for everyone, but especially for nurses, who are more likely than the average person to become injured or disabled at work. Understanding how disability insurance works for nurses and other healthcare workers will make it easier to compare your options and find the best coverage for your situation. 

 

What Is Disability Insurance? 

Disability insurance replaces part of your income if an injury or disability prevents you from working. It allows you to continue bringing in a regular income and pay your bills even if you’re unable to work. 

Disability insurance is available through private providers, and sometimes employers, but also can be obtained through the Social Security Administration.

Becoming disabled is something most people don’t think about, but the reality is that one in four Americans is currently living with a disability. That means everyone can benefit from disability insurance, regardless of age or circumstances. 

More information here:

How Much Disability Insurance Should You Buy?

 

Why Do Nurses Need Disability Insurance? 

You invested a lot of time and money into becoming a nurse by attending college for at least four years and possibly even obtaining an advanced degree. And nurses earn good incomes—the mean annual wage for a nurse is $89,010. Disability insurance protects the financial investment you made into becoming a nurse.

Unfortunately, nurses are also at higher risk of becoming disabled. The Occupational Safety and Health Administration found that working in a hospital is more dangerous than working in construction. 

Half of all injuries to hospital employees come from routine activities, like bending, reaching, or lifting. However, serious injuries can occur from lifting, transferring, and repositioning patients. These risks make disability insurance a necessity for all nurses. 

 

How Does Disability Insurance Work?

When you purchase disability insurance, you’ll pay a monthly premium to receive a certain amount of coverage. Your premium will depend on your health as well as the amount and length of coverage.

If you’re unable to work, you’ll receive a monthly benefit, which is typically between 60%-80% of your income. Here are a few things to consider before purchasing disability insurance:

  • Definition of disability: Every disability policy has a slightly different version of what disability means. An own occupation definition means you’re disabled if you can’t work in your current profession but can still work in a different profession. Any occupation means you’ll only qualify if your disability prevents you from working anywhere. 
  • Elimination period: The elimination period is the length of time you’re required to wait after you’re disabled before you can start receiving benefits. This is usually less than 30 days for short-term disability, but it can range from 30-180 days for long-term disability insurance. 
  • Benefit period: The benefit period is how long you can receive disability benefits. If you purchase short-term disability, this will likely be for a year or less, while long-term disability insurance could last until retirement age.

 

What Is the Difference Between GSI, Individual, and Group Disability Coverage?

When it comes to disability insurance, you’ll have to decide whether you want a group or individual policy. Group plans are available through employers and take less effort to sign up for. Signing up for a group plan automatically covers you regardless of age or health history. But if you lose your job, you can’t usually take your coverage with you.

Guaranteed Standard Issue (GSI) disability insurance is a type of group insurance that’s usually available to employees at large organizations. This type of insurance doesn’t require any medical underwriting, making it a good option for nurses with pre-existing conditions. 

In comparison, individual disability coverage is a plan you buy on your own, so as long as you pay the premiums, it’ll stay with you regardless of how often you change jobs. You’ll probably pay more for an individual plan, but you’ll have access to a broader range of coverages. 

More information here:

Guaranteed Standard Issue (GSI) vs. Traditional Disability Insurance

 

How Much Does Disability Insurance Cost for Nurses? 

nurse disability insurance

Disability insurance typically costs between 1%-3% of your income, but the exact cost will vary based on the following factors:

  • Age
  • Overall health
  • Current income
  • Location
  • Benefits and features
  • The type of nursing you practice
  • The facility you work in

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Which Disability Insurance Riders Should Nurses Add?

A disability insurance rider is a provision that adds benefits or amends the terms of an insurance policy. It allows you to add additional coverage to your current policy. Here are some disability insurance riders nurses should consider:

  • Cost of living adjustment (COLA): This rider adjusts your monthly benefit to keep pace with inflation. This rider is a must for those early in their career.
  • Student loan rider: If you become disabled, this allows you to continue making student loan payments while you can’t work. 
  • Future increase: You can add more coverage as your income increases without undergoing another medical exam.
  • Guaranteed premiums: As long as you make your payments on time, your policy will remain active at the same rate.
  • Partial disability: Your policy will pay out benefits if you lose only part of your income due to a disability. This is a rider everyone should have on their policy.

 

Where Can Nurses Buy Insurance?

If you want to purchase an individual policy, consider working with a WCI-recommended insurance broker. A broker can help you compare policies from several different providers. As you explore your options, pay attention to the coverage amount, elimination period, and benefit period. 

Check with your current employer, since they may already provide this as part of your benefits package. A WCI-recommended insurance broker can review your group benefits package and any disability benefits you qualify for and help you determine that the benefits are adequate for your current and any future needs. You can also contact professional organizations, like the American Nurses Association (ANA), to see if they offer group disability insurance for nurses.

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