Most business people insure their cars, homes and lives. We all have people and stuff to protect. But what about one of your most important assets – your ability to earn income? The one thing that makes all other things in your life possible is your income. I would bet you’d agree that it’s an asset worth protecting.
What would happen if you were disabled due to an illness or an injury, and you could not work? If you think that's too improbable to worry about, think about this. Almost 90% of disabilities are caused by various forms of illness. Cancer, anxiety and depression, muscle and back problems, and heart disease are among the most common causes.
It’s not the freak accidents that most people think of that cause disability. We have a 25% chance of becoming disabled before we retire. If you were among this 25%, how would you pay your mortgage and utilities, buy groceries, pay your car note and live your daily life?
Here's what you need to know:
Disability income insurance (DI) can help replace your income if you become too sick or hurt to work. It provides a buffer against the unexpected. Should disability strike, DI provides income that can help keep your household running. That's one less thing to worry about when you're adjusting to changed circumstances.
Total Disability is defined as an inability to return to work in any occupation, or as an inability to work in your own occupation. A Residual Disability benefit provides protection in the event of partial disability, or during a recovery period. It is payable in an amount that is proportionate to the loss of income suffered due to sickness or injury. It supports your financial recovery while you recover physically. However, it’s not available with most group plans.
Options (Riders) are available for your specific needs. These can include increased coverage as your income grows, with no medical insurability requirement. You can also get benefits that will keep pace with the cost of living, and protect your retirement contributions and student loan payments.
Most professionals expect to change jobs or employers during the course of their career. Group long term disability coverage cannot go with you when you leave for another job. But individual DI coverage goes with you as you move through your career.
To avoid losing your coverage just when you need it most, choose a policy that's both non-cancellable and guaranteed renewable to age 65—with premiums also guaranteed until age 65.
With group or association group coverage, you risk being left unprotected at a time in your life when it would be very difficult to qualify for coverage from another provider. It's important to note that the cost of individual disability income protection is age-based, so you can lock in a lower rate by buying now, while you're young and healthy.
You've made a significant investment of time and money to build your career with the promise of financial security and the other rewards your profession provides. You may want to protect the income that provides everything in your life.