As a software engineer you create the programs that help power the economy. Nearly every industry depends on professionals like you. As such, there aren’t enough of your skills to satisfy the needs of an economy becoming more digital and automated each day.
Software engineers and developers can create systems and applications to perform an infinite number of tasks.
One thing they can’t do is engineer a program to finally cope with a disability. For that, you need disability insurance.
If you’re a typical software engineer, you:
- Start your career earning about $85,000 a year.
- Earn an average annual salary of around $105,000. The best-paid 25 percent make an average of $128,960, while the lowest-paid 25 percent earn about $77,710.
- Went to a college that had an average annual cost of $37,000.
- Are in high demand. The Bureau of Labor Statistics projects employment of software engineers will grow 31 percent between 2016 and 2026.
- Can work in various positions, giving you flexibility and freedom throughout your career.
Software engineers need individual disability insurance because:
- According to the Social Security Administration, about 25 percent of 20-year-olds will become disabled at some point before reaching age 67.
- Depending on how much schooling you went through, you may thousands of dollars of student loan debt. This debt will not be forgiven if you can't work due to a disability.
- Even if you can do other types of work with a disability, the odds are you will earn a fraction of what you make as a software engineer.
- Whether as an employee or contractor, you services will be in high demand. You may have opportunities to move on to a position with a large corporation or join a tech start-up. Since group disability insurance is tied to your employment, you should have your own individual policy you can count on no matter where you work.
- You have many responsibilities. The more complex your profession, the greater the potential risk that an injury or illness can limit your ability to perform some or all of your regular work tasks.
- You may have a significant amount of income to replace if you can’t work, depending on where you live, your education level and the industry in which you work. The states that pay software developers the highest mean salary are Washington ($131,430), California ($126,470), District of Columbia ($115,900), New York ($115,530), and Maryland ($112,190). High-paying industries for software engineers include audio and video equipment manufacturing, securities and commodity exchanges, computer and peripheral equipment manufacturing, and aerospace product and parts manufacturing.
Software engineers can expect to pay the following estimated monthly premium for disability insurance:
- A 27-year-old male software engineer making $85,000 in Indianapolis could get a $1,500 monthly benefit for about $15 a month, a $3,000 monthly benefit for $26, or a $4,430 monthly benefit for $36.
- A 35-year-old female software engineer making $110,000 in Baltimore would pay about $40 a month for an $1,800 monthly benefit, $77 a month for a $3,600 benefit, and $113 for a $5,390 benefit.
- A 43-year-old male software engineer making $130,000 in Austin, Texas would be quoted about $47 a month for a $2,100 monthly benefit, $91 for a $4,200 monthly benefit, and $133 for a $6,220 monthly benefit.
- A 50-year-old female software engineer earning $160,000 in San Francisco would pay about $130 a month for a $2,500 monthly benefit, $250 for a $4,900 monthly benefit, and $375 for a $7,370 monthly benefit.
These quotes assume a five-year benefit period and a 90-day waiting period.
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Your monthly disability insurance premium will depend on the following factors:
- Your age and health. The younger and healthier you are, the less you will pay.
- Your income. Disability insurance is designed to replace a percentage of your income if an injury or illness limits your ability to work in your profession.
- Where you live.
- The benefits and features of your disability insurance policy.
Disability insurance companies group jobs into specific occupational classes. These classes take into account the hazards of the job and the difficulty in returning to work following a disability. Another factor is the claim experience associated with certain professions.
Insurance companies generally classify occupations on a scale of 1 to 5 or 6. Typically, the higher the numerical value of the classification the lower the rate available from the insurance company.
Disability insurance companies tend to rate software engineers in their highest occupational class. This means they consider the profession lower risk for disability claims than other vocations. It also means they will pay less for coverage than others with similar underwriting attributes.
Some insurance companies may knock software engineers down a class or two based on education level or annual salary.