Disability insurance is really important because you have to think about it for a minute, if I got in an accident and I couldn't work for the next 2 years, where does my income come from? How do I pay my mortgage? How do I feed my kids? How do I take care of the necessities in life? So what disability insurance is, your paying an insurance company and in the event that you can't work, their gonna pay you some percentage of your salary. And it's usually between 40 and 60% of your pay. So for example if I make $50,000 a year and I can't work because of some injury or illness, the disability insurance company might pay me $30,000 a year as an example while that disability is lasting. And hopefully I get better and I can come back to work and I don't need the insurance anymore. But in the event it's a long term disability, it continues to pay me some income that I can use to support myself and my loved ones in the event that something happened.
Now there's usually 2 types of disability insurance, short term disability insurance which usually covers you when a disability last 6 months or less and long term disability insurance which covers you when the disability lasts for more then 6 months. Everybody should have disability insurance, often times you'll buy it through your employer. One of the leading causes of financial tragedies have to relate to someone having a serious accident or illness and then not able to earn income. And as a result it ends up pushing them over the financial edge. All of that can be avoided by having adequate disability insurance.