May is Disability Insurance Awareness Month!
How do you determine if Disability Insurance is appropriate for you? Well, if you are employed and earn income, and your income is essential to you and/or your family’s ability to meet your financial obligations, then you most likely need disability insurance. The possibility of a disabling illness or injury may seem remote, but the statistics provide much to be concerned about.
What is a disability? Basically, any illness or injury that affects your ability to complete the normal functions and activities of your current employment. If you’re unable to work, or unable to complete all of the obligations of your job for any significant length of time, you will most certainly experience a loss of income (partial or total) as a result. Disabilities can be short-term (90 days or less) or long-term (90 days or longer) and each can have a devastating financial effect. A study by Bankrate.com in 2013 determined that 77% of Americans had a cash-on-hand savings of only 3 months or less, and up to 27% of Americans live paycheck-to-paycheck.
You actually have a 25% chance of suffering a disability that keeps you out of work for 90 days or longer at some point during your working career. Remember that 90% of disabilities are caused by illnesses — not accidents (The Council for Disability Awareness, Long-Term Disability Claims Review, 2010), so being cautious or having an occupation that is “not dangerous” does not make much of a difference! The included infographic by TLE provides a quick visual glimpse of this information.
Most of us have some kind of monthly obligations, such as a mortgage, rent, utilities, or credit card bills. Would you be able to meet your financial obligations if you were too ill or injured to work for an extended length of time? Furthermore, depending on your health insurance status, a disabling injury or illness could lead to significant medical bills and other expenses that can add up sharply. A 30-year-old who makes $100,000 a year and suffers a permanent disability could lose well over $3 million in future earnings over the following 30 years.
For all these reasons, almost anyone who works—whether they’re single, married, with children or without—should consider disability insurance. Now many people are fortunate enough to work for employers who offer group long-term disability income protection coverage to their employees. This is a good start – however it is essential to review the limits and terms of this coverage, as well as the taxability of the benefits and whether this coverage would provide full protection to the extent you need it. Often there is a gap in the coverage level of your employer benefit and what you are able to cover independently with an individual plan, and this can be easily filled in with a supplemental policy. If you are self-employed, run your own business, or do not have disability protection through your employer it is a disaster waiting to happen and something that should absolutely be looked at.
McLean Insurance specializes in reviewing your overall needs for disability income protection based on your individual situation and making a proper recommendation. Independently representing multiple top carriers in the market, we can find and customize a plan that meets your needs and fits into your budget. Call Mike Feinberg at 703-637-4339 to find out more and remember – your income can only be protected before any illness or injury causes a disability – so don’t wait!