Part-Time and Disability Insurance?

Nancy is considering disability insurance for herself. She works part time, and she's running up against work-hour limits for disability insurance. Dave explains why that is.

QUESTION: Nancy in Denver is considering disability insurance for herself. She works part time, and she’s running up against work-hour limits for disability insurance. Dave explains why that is.

ANSWER: That’s very standard. Basically, you can only get disability insurance on permanent full-time employment, or permanent 3/4 part-time is what they’re describing there. It would be a limited number of hours in a permanent job. When you don’t have an earned income, you don’t qualify for disability at all.

In your case, you’re almost there, and the only question is do you want to work a little bit more in order to qualify for it?

My wife, for instance, does not have disability insurance. She has not had a full-time job in 27 years—since our first child was born. She doesn’t qualify for that, and it’s just one of the risks that we have to take, because you can only insure someone for disability when they have an earned income. Not an investment income, earned income. That would be self-employment income, commission income or wage income.