Protecting Your Most Important Asset
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Tuesday, June 4, 2019

The majority of people are aware that life insurance is a no-brainer – financially protecting your loved ones in the event of your death is common knowledge. But most people don’t consider the possibility of becoming disabled during their career, which from a statistics standpoint is far more likely than a sudden/early death.

The Social Security Administration estimates up to 91.2% of women and 85.6% of men will live to see 67. What most people find shocking is that this same reports states that a 20-year-old has up to a 26.8% chance of being injured for a minimum of 12 months before retirement. To make matters more dire, the Council for Disability Awareness states that long-term disability absence typically lasts nearly three years – this is a large gaping hole in your income that most people can’t afford.

Even knowing this, people are still prone to suffer from optimism bias which is the belief that we are somehow less likely to suffer from these instances. On top of this, most people think of disabilities to involve accidents at more dangerous types of jobs. They don’t consider the fact that disability can involve things as simple as back-injuries or even accidents outside of work, on top of severe illnesses such as cancer that can happen to anyone.

At first glance, disability insurance seems very expensive given the odds of disability happening. But if you’re willing to buy into a life-insurance policy at a young age on even lower odds, shouldn’t the same logic apply? It can take some time to find the right one to suit your needs, but it’ll be worth it in the end and could save you more than you realize. Here are some things to consider if you’re still on the fence.


1. If you rely on a paycheck, disability insurance is a necessity.

For reasons stated above, there’s an alarmingly high chance that you’ll end up disabled no matter what kind of job you have. Not only does this create an income gap for yourself, but if you have others that rely on your income such as a family, you owe it to them as well to make sure that you have a financially stable plan for unfortunate situations.


2. Opt for a long-term policy, and don’t skimp on how much you might need.

While short-term policies are cheaper, we wouldn’t recommend them. It’s better to save separate emergency funds and spend your money on better long-term solutions instead. Remember, the average disability absence is three years – a short-term policy would only cover a fraction of that time.

While it may be tempting to save money and opt for a lesser long-term policy, it’s important to keep in mind that cost-of-living increases are still likely to happen during a disability period, not to mention any additional, unforeseen medical expenses you may need to cover during this period.


3. Your employer’s standard plan may not be sufficient, but you should look into buying into additional insurance through them or a professional association.

Only one-third of employers offer any disability insurance, but even these are often only short-term and insufficient for many disability situations. Fortunately, some of them allow you to purchase additional disability insurance at a cost-savings. If your employer doesn’t offer this, or you believe that you could find a better plan, you could also look at coverage through a professional association group – these often have the added benefit of being tailored to your profession as well.

Above all, it’s important to keep in mind that disability is more likely than an untimely or sudden death. Keep yourself and your family secure with a disability insurance policy and feel free to contact us at Income Protection Resource Group with any questions.



 
 
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