Are You Rolling the Dice?
May 18, 2017
With your Family’s Financial Future
You’ve been working hard, you’re making a good income and paying off debt, you’re saving for the kid’s college and for retirement – You are the master of your ship - Life is pretty good. You are the well-oiled machine that cranks out the money – invincible. The thought of stormy seas and a broken mast hasn’t even crossed your mind. Those things happen to other people. In fact, 30 million other people, Americans, between the ages of 21 and 64 are disabled, according the most recent U. S. census.1
There is only so much that we can do to reduce the risk of illness or accident. Often times they just happen. The question becomes, are we prepared in the event of a recreational or transportation accident? What about cancer, heart attack, stroke, or musculoskeletal disorders? Will our financial plans and goals be able to be fulfilled if we are no longer able to do the job that has gotten us to where we are?
Individual Disability Insurance is a great way to transfer this risk to an insurance company. In many cases Individual Disability Insurance could replace your net income so that you can still maintain your lifestyle and preserve your financial security.
We insure many things, our cars, homes, health, businesses, other valuables and even our lives, but often neglect to insure what pays for it all – our income.
An Individual Disability Insurance Contract can pay (depending on the provisions of the policy purchased) in 3 ways.
- Total Disability – unable to perform the material and substantial duties of Regular Occupation (or Professional Specialty) – some policies allow for a True Own Occupation definition of disability. An example would be a surgeon who was no longer able to perform surgery but was able to teach at a college or hospital. His/her disability benefits would not be reduced by his/her teaching salary – he/she would be able to receive both.
- Residual or Partial Disability – unable to perform some but not all of the material and substantial duties of occupation and suffering a loss of 15% or more of income. In this case the insured would receive the percentage that was lost due to the disability in benefits.
- Catastrophic Disability – unable to perform the material and substantial duties of Regular Occupation (or Professional Specialty) and be unable to perform 2 of 6 Activities of Daily living, or be Presumptively or Cognitively disabled. This provision can provide a monthly benefit in addition to any other disability benefit payments under the policy if you are catastrophically disabled as just described.
Other optional policy benefits –
- Future Purchase Option Rider – option to purchase additional benefit (with no underwriting) as income grows
- Cost of Living Adjustment Rider – option for on-claim benefits to increase
- Retirement Protection Rider – option to protect your ability to fund your retirement
Be sure to ask about a policy that is Non-Cancelable and Guaranteed Renewable. This renewability provision protects you from any rate increases or changes (even if your health or financial situation changes) over the course of your career and provides piece of mind that the policy will be there if you ever need it.
Your income is the foundation of the life that you are living. Your income enables you to maintain your standard of living and provides for your goals and financial security. What happens in the event you become too sick or injured to work and earn a living? Unfortunately, disability is more common than you might think – do you really want to roll the dice?
1Council for Disability Awareness, www.disabilitycanhappen.org