The question, “What is disability insurance even for?” may not come up often. Of course, most folks understand that disability insurance benefits pay you if you become disabled and can no longer work. Typically, the common argument one hears sounds something like, “Isn’t that what state disability is for?” The answer is: yes and no.
California state disability is short-term disability that pays out benefits for up to a year. It also doesn’t automatically cover business owners which, in this day and age of entrepreneurship, a lot of us are. So that’s the “yes” part of the answer to the state DI question.
The “no” part comes in when we start thinking about where disability insurance benefits really go. The aspect of life that disability insurance benefits typically get distributed to is called: M.U.G.
M: A home mortgage bill doesn’t stop showing up in your mailbox each month after a year.
U: Utilities companies don’t let you ride off the wave of being a perfect patron in years past.
G: Groceries don’t grow on trees—and even the ones that do need water, which brings us back to U: utilities.
MUG is the stuff of life for the average American. And MUG doesn’t go away after a year of State DI. Individual disability insurance coverage protects your MUG so you can continue living the life you’ve created.