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What's the best way to obtain disability insurance?

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We've talked here before about the importance of having disability insurance. More than half of the households in this country report that they don't have enough readily-available money saved up to last even a month should an injury or illness strike.

We often discuss employer-provided disability insurance and individual disability insurance plans. However, there are a couple of other ways in which people can obtain disability insurance. Here are the primary sources:

-- Employer-paid insurance: If the business you work for offers this, it's often the easiest, least expensive way to obtain coverage. The employer pays at least part of the premiums. Further, it's easier to qualify for than if you go out and get insurance on your own.

-- Workplace-purchased insurance: Some employers offer the opportunity for workers to obtain insurance through their insurance broker. Although the employer doesn't pay any part of the premiums, employees can get the policy at a group rate.

-- Professional associations: Many of these organizations offer group disability insurance rates to their members.

-- Individually-purchased insurance: You can go through a broker to obtain an individual policy or directly to an insurance company. While an individual policy is more customizable to your needs, your ability to qualify and the cost are based in part on factors like your age and health. However, you don't have to worry about losing it if you lose your job because it's not tied to your employer.

Regardless of how you obtain your disability insurance, whether short-term or long-term, it's essential to understand the terms of the policy before you need it. If you have it through an employer, make sure that it offers enough coverage. You may decide that it doesn't replace enough income and choose to purchase an individual policy.

If you're shopping for an individual policy, read the fine print (or better yet, have a legal professional review it) before you buy it. These terms can make all the difference to your and your family's financial well-being should you be unable to work.

Source: NerdWallet, "Disability Insurance Explained," Barbara Marquand, Feb. 05, 2016

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