For 4 years when I had no company-paid disability insurance, I considered buying an individual plan but never did. My rationale follows:Risk of disabilityThe disability statistics showed a 20% chance of a 3 month or longer disability by age 65. However, I planned on having enough to retire by 55 and the chance of disability by 55 dropped to 10%. If I purchased a disability policy, I would taken at least a 180 day waiting period and I was prepared financially for a whole year. I guessed that disabilities lasting over a year would drop the chance to 5%. I considered that disabilities from automobiles would be covered by auto insurance, that I had less hazardous job and hobbies than most, and I hadn't suffered any disabilities so far. So, I guessed my real risk of an uncompensated, long-term disability was closer to 1%.PoliciesThe policies I considered cost anywhere from $1000 to $1500 a year (with a 180 day waiting period) depending on which riders were added. My expected monthly benefit would have been $3000 a month. I questioned how easy it would be to collect as I read the language about the ability to do my current work or do work within my profession.Source of incomeIf I were disabled, I considered drawing the interest from my retirement fund (using lifetime payments to avoid any IRA penalties). If necessary, my wife could have worked full-time. If necessary, my Mom would have provided several hundred dollars a month. All of these potential sources greatly exceeded the income I would have received from a disability policy.ConclusionI decided to invest the money I would have spent on disability insurance into my retirement. I know this approach is contrary to the advice recommended on this site and by most most financial experts but I share my rationale so that others may examine all recommended advice in light of their own unique circumstances.
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