Why might it be beneficial for an employee to purchase private disability income insurance when already covered by worker's compensation?

Purchasing private disability income insurance can indeed be advantageous for an employee even if they are already covered by worker's compensation. Primarily, the potential inadequacy of worker's compensation benefits plays a significant role in this decision.

Worker's compensation typically provides benefits primarily for work-related injuries or illnesses. However, these benefits may not adequately cover the employee's entire income, especially if the individual was earning above the average wage, had dependents, or faced long recovery times. Often, worker's compensation is calibrated to replace only a portion of pre-injury earnings, which could leave a substantial gap. This is where private disability insurance becomes important, as it can supplement the income stream by offering additional financial support to help maintain the employee's standard of living while they are unable to work.

In contrast, options that suggest worker's compensation provides sufficient income or that private insurance is less expensive do not take into account the specific financial needs and circumstances faced by the employee. Additionally, while private insurance may offer family benefits in some cases, this is not the primary reason for someone to seek additional coverage. Thus, the choice to purchase private disability income insurance is fundamentally linked to ensuring adequate financial protection beyond what worker's compensation can provide.