You’re working hard to build a strong foundation for your anticipated retirement. What would happen to your family’s future, if something should interrupt your ability to earn a living?
It can be difficult to plan for unforeseen events. For a lot of us, it can be uncomfortable to even consider the possibility that misfortune could occur in our own lives.
Consider This
How long would you be able to stay afloat, if you were no longer able to earn an income? Think about your mortgage, rent, bills, groceries, etc. That stuff adds up quickly – especially if you’re not earning a paycheck.
Fifty percent of Americans couldn’t meet expenses after just one month without a paycheck.
- Life Happens Disability Survey
We’re accustomed to protecting our cars and homes with insurance. Are you insuring your most valuable asset – your ability to earn a living? Disability coverage is insurance for the single most precious asset you will ever have – your ability to earn income over your lifetime.
If you are unable to work due to sickness or injury, disability insurance will allow you to fulfill your commitments and continue providing for your loved ones. Coverage typically replaces between 50 to 70 percent of your paycheck. Benefits can be used for everyday expenses, such as your mortgage, bills, auto loan and groceries. If structured properly, the payout can be tax free.
The average absence from work, due to long-term disability, lasts nearly three years.
- Council for Disability Awareness
That’s a long time to survive without a steady income.
Already Covered?
If your employer offers disability insurance, ask a lot of questions about your policy. What portion of your income will be replaced? Is there a maximum payout? Is there a time limit to your coverage? How long is the required waiting period to collect on a claim? Does your policy cover your “own occupation” or “any occupation”?
Note, if your employer pays the premium, benefits will likely be treated as taxable income.
If your coverage amount won’t cover your monthly expenditures, you may want to consider an individual supplemental policy.
If you know anyone who has applied for Social Security Disability Insurance (SSDI), you’ll know that it is a difficult and time consuming process. The average application takes over a year and a half to process. Eighty percent of first-time claims are denied. It is common – for those who can afford it – to hire an attorney to assist with the hearing process. That can get expensive quickly! In order to qualify for SSDI, you must prove that your disability will last more than 12 months, and that you are unable to work in any profession.
A significant number of SSDI claimants received less than $1,000 per month.
- U.S. Social Security Administration
How far will that go at your current standard of living?
Covered by Workers’ Comp? Don’t Count On It.
Workers’ compensation covers incidents that occur on the work site. However, a majority of injuries that qualify as debilitating occur outside of the workplace, and thus are not covered.
Ninety-five percent of disabling accidents and illnesses are not covered by Workers’ Compensation.
- Council for Disability Awareness, Long-Term Disability Claims Review, 2012
There are countless stories of people’s lives being unexpectedly disrupted by illness or injury. Consider Stephen Hawking’s ill-fated diagnosis at the age of 21. Think about Superman, Christopher Reeve, becoming quadriplegic after falling off of a horse. These things can be difficult to consider, but they do happen. Be prepared, so you’ll have more control if something unexpected should happen in your life.
Thirty-three percent of workers will be disabled for a week or more before retirement age.
- U.S. Social Security Administration
A Sense of Security
Feel a sense of security, knowing that your livelihood will be protected in case something unexpected should happen, and you are unable to work for an extended period of time.
If you have questions about whether you have adequate coverage to meet your family’s needs, please give us a call. 405.767.1230.
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