Few forms of insurance are as unappreciated by consumers as disability insurance. This insurance is meant to cover your income in the event you are physically unable to work. Most people don't believe disability will strike -- until it does. Many large employers provide workers with some disability insurance, but the amount -- typically 50% to 60% of your annual salary -- may not be enough in the event of a devastating illness or injury. This week's Ages & Stages looks at choosing disability insurance through the years.

20s thru 30s
Relying on employer coverage is probably a decent bet at this stage. But what if you're in between jobs, or your employer doesn't offer disability insurance as a benefit? Buying your own coverage may not be one of your financial priorities -- particularly since private insurance can mean sharply higher premiums than your employer would pay through a group plan. And, hey, you're indestructible at this age, right?

Wrong. As low as the odds are right now, you should not ignore the very real possibility that an accident or injury could prevent you from working for the rest of your life. As this article shows, there are risks to being a total financial tightwad, as tempting as it might seem. If you can't swing disability insurance, double your efforts at building personal savings. If you're looking for work, consider taking on a lower-paying part-time job. If you're employed full time and not carrying some form of disability insurance, sock away at least six months' salary to help in case injury strikes.

40s thru 50s
During your prime earning years, it's imperative to ensure you and your partner together have enough disability insurance to cover you should you no longer be able to work. You may very well be covered by your employer, but perhaps not covered enough. Ask your employer for specifics about your disability benefits, including what percentage of income is provided and for how long.

Use a good calculator to figure out how much disability insurance you need. It will also help evaluate to what extent you would be able to depend on your own money to support yourself after short-term benefits run out. That figure will tell you just how long you could get by without additional insurance.

When shopping for private disability coverage, ask the amount and duration of payments, whether a cap exists and whether the benefits are coordinated with Social Security in the event of permanent disability.

60s+
If you have saved diligently through your lifetime and accumulated wealth, it's likely you no longer need to carry disability insurance. But if you're one of the thousands of seniors who are forced to continue to work in your 60s and beyond, disability insurance should be a priority now -- when the risk of debilitating illness or injury is greater than at any time during your life.
The question is, have you saved enough to cover you if you had to stop working? If you decide that you have sufficient savings, drop your disability policy and add the money you have been spending on this insurance it to your retirement savings.

By Terri Cullen
The Wall Street Journal
2004