By Cyndi Barnett
Are you going to live forever? Of course not. As someone once said, life is terminal – and no one gets out alive. Most of us understand that and have accepted it. We all want to leave this world with our financial affairs in good order. So we draft a will and an estate plan, and we purchase life insurance. But few of us consider disability insurance – the coverage that can help us maintain our income and quality of life while we are alive.
Do you think you don’t need disability coverage? Think again. What are the chances that you will be disabled at some point in your life? Statistically, the chances are much higher than you might expect.
- The Social Security Administration estimates that a 20yr old worker has a 3 in 10 chance of becoming disabled before reaching retirement age. (Soc Sec Disability Benefits, SSA Pub Number 05-10029, July 2011)
- In 2009 alone, payments were made to 12.2 million people aged 18-64 on the basis of their own disability. (Fast Facts & Figures about Soc Sec, 2011, US Soc Sec Admin Office of Retirement & Disability Policy)
As these statistics show, your chances of being disabled are great. Of course, statistics can be misleading- you might never become disabled. But then again, how many of your friends and family members have been in car accidents? Disability can be caused by illness as well as injury. How many people do you know who have suffered a heart attack or stroke?
A fate worse than death? In financial terms, maybe. Consider this… when you die, your income stops. But so do your expenses. If you are severely disabled and cannot work, your income stops too… but your expenses do not. In fact, due to the cost of medical treatment, your expenses may likely increase. About 25% of bankruptcies (and nearly 50% of foreclosures) occur after a serious injury or illness. Everyone who works and earns a living should consider purchasing disability income protection.
Will the government take care of you? Many disabled people discover that they don’t qualify for state assistance. Others find that the amount or length of coverage available is not sufficient to support them or that their employer doesn’t offer Disability Insurance. Or they find out the hard way, that the time it takes to get federal disability support takes too long and the damage to the family and lifestyle is already done. It’s an all-too-common story. Whether or not you choose to rely on government assistance is up to you, but I would recommend having a back-up plan.
It’s time to start thinking about disability insurance. We’d all like to believe that we’ll never be disabled. But the reality is… it could happen to you. If it does, will your family be taken care of? Will you be prepared?
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Cyndi Barnett, GPS Wealth Management, a Certified Financial Planner™ and Certified Tax Specialist™. Email [email protected] to discuss your particular situation for Investments, Retirement, Insurance, Taxes, and Estate Planning.
Registered Representative and Investment Advisor Representative. Securities are offered through Questar Capital (QCC), Member FINRA/SIPC. Advisory Services offered through Questar Asset Management (QAM), A Registered Investment Advisor. GPS Wealth Management is independent of QCC and QAM. This material was prepared by Emerald. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.
