Disability Insurance for Nurses: Income Protection for Your Loved Ones

You’ve committed years to your nursing education and training, as well as countless hours carrying the weight of your patients’ wellbeing. But a serious injury or illness could suddenly change the trajectory of your nursing career and harm you and your family financially. That’s why disability insurance is a must-have for most nurses.

Your employer might provide some level of partial disability insurance. Have you looked into this benefit? It’s fine if not, most nurses, NPs, and CRNAs don’t.

You might be surprised to learn that many hospital and association group disability policies fall short when it’s time to file an insurance claim. An individual policy can either supplement existing coverage or provide adequate protection on its own.

Employers often limit benefits to short-term disability only. If they do provide coverage, the benefit might be a fraction of your earnings. Furthermore, with so many nurses taking travel nursing jobs, an individual disability policy can also provide portability as you move between jobs.

We’ll discuss what other nurses are doing with their disability insurance and why you’d want to consider purchasing your own policy, including coverage levels and the approximate cost.

Nurses need disability insurance — here’s why

You might not think you need a disability insurance policy considering your age and overall health. But according to the Social Security Administration, one in every four workers will experience a disability before they hit retirement age.

My mom worked for over 30 years as a labor and delivery nurse. There were three incidents that could’ve been a financial disaster for our family if they’d happened differently.

Real situations when nurse disability insurance saved the day

After a night shift, my mom was driving home late at night. A car ran through a stop sign and T-boned her vehicle. The firefighters cut her out of the vehicle. Luckily she was okay. I remember sitting by the door waiting for her to come home after hearing there was an accident (I was about three or four years old at the time).

The next event in her career happened when my youngest brother was born. She had complications with her pregnancy from blood clots, resulting in her inability to work for a significant period of time. She ended up taking years away from work. Finances were tight (my dad was a teacher), but she made it work.

When I was in high school, my parents asked me for a loan because we were running out of savings. My mom decided she needed to go back to work to boost their retirement savings and stabilize our family finances.

One day when she was rushing between patients, she tripped on a monitor cord and hit her head pretty hard. Luckily, she ended up recovering. Injuries like this show the risk that nurses face, and many nurses don’t even think about the risk of not having income protection.

If one of those three incidents had resulted in a permanent disability, my mom wouldn’t have been able to financially contribute to our family. Her workplace benefits were stingy, and they didn’t cover all that much.

This is why you should buy an individually owned disability policy as a nurse.

Other disabling events nurses can potentially face

When thinking about a disability, we often think of an immediate injury like getting into a car accident while commuting to work. But many disability claims are related to medical conditions that develop over time.

The Council for Disability Awareness lists musculoskeletal disorders, cancer, injuries (e.g. fractures, sprains and strains of muscles and ligaments), mental health issues and circulatory conditions as the most common reasons for long-term disability claims.

Nurses experience a long list of occupational hazards that put their bodies and minds at higher risk of injury or illness. Additionally, the many physical aspects of being a nurse can take a major toll on you over time, from being on your feet non-stop and lifting patients to constant high stress and work overload.

An unfortunate diagnosis or any number of injuries in the workplace or out in the world could abruptly end your nursing career.

If you have a family depending on your nursing income, then you need disability insurance as income protection.

Disability insurance views within the nursing profession

More than 1,500 readers and clients responded to our 2022 Student Loan Planner Insurance Survey. Of that sample, 82 nursing professionals provided insight related to their existing disability coverage — or lack thereof.

Here’s what we learned about the nursing community.

Nurses see the value of disability insurance but are slow to act

Our survey found that, overall, the nursing profession sees the benefit of having income protection in the form of disability insurance. However, different nursing paths view disability insurance differently.

For example, 85% of Certified Registered Nurse Anesthetists (CRNA) and 78% of nurse practitioners believe they need disability coverage. Whereas, only about half of the remaining survey participants who fell into a general nurse category felt disability insurance is needed.

Here’s the inside scoop though: What nurses think they need versus what they actually have is a completely different story.

Gaps in nurse disability insurance coverage

Only 31% of CRNAs, 13% of nurse practitioners and 11% of nurses have purchased their own disability insurance policy.

This suggests the nursing profession as a whole tends to rely on employer coverage instead of carrying disability insurance of their own.

Knowing what you need on paper, but not following through by purchasing a disability policy is a major financial misstep that usually isn’t made obvious until you need it.

If you have a high risk tolerance and are willing to rely on friends or family if something were to happen, that’s one thing. But nurses tend to not be highly speculative investors. That suggests transferring risk to an insurance company for this specific need could make sense for some.

Breadwinner nurses are underestimating the need for disability coverage

Our survey determined the majority of nursing professionals are the breadwinner of their households. Specifically, 85% of CRNAs, 75% of nurse practitioners and 51% of nurses identify as the primary income earner.

If you have loved ones depending on your nursing income, then disability insurance is essential to protecting your family from the unknown.

Yet, many surveyed breadwinner nurses don’t think disability coverage is important.

The most concerning response came from our general nurse category, which is likely made up of Registered Nurses (RN). Only about half of the breadwinners from this category think they need disability insurance at all.

This is shocking data considering these nurses are carrying the financial weight of their family on their shoulders.

Perhaps nurses believe that Social Security disability will cover a bigger percentage of their wages if something happens. But the average SSDI benefit is only $1,223 a month. It’s more likely nurses just don’t think about it.

Bottom line: If you have a spouse, partner or children that are relying on your income to survive and thrive, then disability insurance needs to be a priority.

Disability insurance for nurses: How much coverage do you need?

Disability insurance should cover your living expenses and immediate financial obligations, at a minimum. However, we recommend purchasing the maximum disability insurance benefit available if your budget allows for it.

In most cases, the maximum benefit will be around 60% of your income. But this amount might be adjusted, depending on whether you have an existing disability policy.

If your workplace provides disability coverage, check to see what your monthly benefit will be and the policy parameters for qualifying for a disability claim. A supplemental policy might be needed in order to ensure you’re adequately compensated if you’re injured or become ill.

Nurse disability insurance premiums

Nursing professionals who participated in our survey are paying an average of $45 to $165 per month for their existing disability coverage, depending on the nursing field. However, these reported premiums should be taken with a grain of salt considering many surveyed nurses don’t have their own disability policy or have limited coverage through their employer.

To give you a realistic picture of what to expect for disability premiums, we’ve run cost estimates for multiple disability insurance companies.

Let’s use the average nurse practitioner salary from the Bureau of Labor Statistics to see how much disability coverage could cost for a 30-year-old nurse with a $114,510 salary.

Without existing coverage, the maximum benefit available for this nurse practitioner is $5,800. This ideal benefit could cost:

  • $230 to $311 for a 30-year-old female nurse practitioner.
  • $139 to $189 for a 30-year-old male nurse practitioner.

Unfortunately, disability insurance for female nurses is generally much higher than for their male colleagues because women have a higher risk of disability. However, some insurance companies provide unisex discounts that help bring down premiums to a gender-neutral rate. Still, other states mandate unisex pricing under state law.

Also, keep in mind these cost estimates are for an ideal level of coverage that includes the most common policy riders like a future income increase, own occupation coverage, residual disability coverage and non-cancelable options. It also includes a 90-day waiting period, which is generally recommended.

You can lower or increase your monthly premium by adding or removing certain riders and tweaking your policy to meet your insurance needs.

A risk-averse, budget-conscious nurse might lengthen the period to 180 days until benefits start being paid out while buying only half the coverage she’s eligible for. You can get affordable coverage and you need to know that you don’t need a fully loaded policy to have a decent level of protection.

That said, these types of policy decisions are best made under the guidance of an independent insurance agent who’ll provide unbiased information specific to your situation.

Less than two-thirds of our surveyed nursing professionals have some level of disability coverage through their employer. Nurse practitioners were more likely to have an employer-sponsored disability policy than other nursing categories.

However, just because you have disability coverage where you work, doesn’t mean that you’ll be adequately covered when it’s time to file a claim.

Most employer group policies have limited disability benefits and narrow definitions of what qualifies as a disability.

For example, Baylor Scott & White Health provides basic long-term disability insurance at no cost to its nurses. However, coverage is capped at 50% of its employees’ salary up to $15,000 per month. Additionally, there’s a 180-day waiting period.

If your workplace has a similar waiting period, you’ll have to rely on your emergency savings or family charity to get by for up to six months before you receive your first payment.

Additionally, your employer might exclude certain types of compensation from your benefit calculation, such as overtime wages. Therefore, you might need additional coverage if you regularly pick up extra nursing shifts to make ends meet.

These policies are not the norm. That said, an honest agent can review your coverage for free and let you know if you have decent coverage or if you’re virtually unprotected against disability.

How nurses can benefit from a personal disability insurance policy

If your employer provides disability coverage at no cost to you, then make sure you’re signed up at every enrollment period and verify that it’s actually long-term disability coverage. Keep in mind that your disability benefit will likely be capped, so you could still benefit from a supplemental policy of your own.

However, if you’re responsible for paying the premiums, it’s best to do some comparison shopping to see what an individual disability insurance policy has to offer.

Some of the biggest perks to having your own disability policy include:

  • Portability. If you move to a new hospital or clinic, you won’t lose coverage. Additionally, disability insurance gets dramatically more expensive as you age, so you won’t have to scramble to find a more costly policy in the transition.
  • Stronger definitions of disability. Disability claims can be complicated if an illness or injury isn’t as apparent, such as with a mental health issue or muscular or skeletal condition. Individual policies generally have broader definitions, providing you with better coverage.
  • Tax-free disability benefits. Since premiums for an individual disability policy are paid with post-tax dollars, your monthly disability benefit won’t be taxed. Whereas, a group policy that is paid for by your employer will be taxed.

Keep in mind that if you lose all or part of your nursing income, your federal student loan payment on an income-driven repayment (IDR) plan will also go down. So, as an added benefit, disability income from your own policy won’t be included in your adjusted gross income.

Therefore, it shouldn’t affect your IDR payment calculation, and you can continue to benefit from a lower student loan payment.

Where to find nurse disability insurance: Association partnership vs. an independent insurance agent

As a nurse, you might have access to insurance partnerships through a professional nursing association or society.

For example, the American Association of Nurse Anesthesiology (AANA) offers group disability insurance underwritten by New York Life. Benefits are limited to 70% of your average monthly income (including other existing disability insurance) with a $12,000 monthly benefit maximum.

However, your premium will likely change over time with an association group disability policy. For instance, rates through AANA change as you enter a new age bracket or when an adjustment is made for your entire age bracket and rate class.

In most cases, you’ll find better disability coverage and locked-in rates with an independent insurance agent.

SLP Insurance LLC works with independent insurance agents who specialize in disability insurance and have access to volume-based discounts you might not find elsewhere.

These knowledgeable agents can talk through policy rider options and answer any questions to help ensure you understand your disability coverage. We also ask them to refer your business to another agent if they’re aware of a special discount program or a better coverage option.

To receive a free one-on-one assessment of your insurance needs, start the free disability insurance quote process by using the form below.

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