Disability Insurance - A Smart Purchase or Waste of Money?
Let's face it - nobody purchases Disability Income insurance because they actually think they'll ever need it. Most people either do not carry Disability insurance or simply consider it a waste of money. Considering that a debilitating injury or illness is not something most people witness every day, this is a reasonable way to feel. The reality is however that it does happen, and a person is significantly more likely to become disabled during their professional career than die prematurely. So why is it that most people make sure they have Life insurance, but not Disability insurance?
Disability insurance may not be a necessity for everyone - however for someone who depends on his/her ability to continue earning an income, Disability Income insurance is critical. For someone who depends on his/her income, Disability insurance is the most effective way of insuring his/her future and also the future of his/her family. Disability Insurance provides income protection against a debilitating injury or illness. If you are unable to perform the material duties of your occupation, Disability insurance will provide you a monthly benefit to assist in replacing the loss of income experienced. There are many different types of Disability insurance and many different provisions a policy may or may not include.
Rather than going into the details of a Disability insurance contract, it is important to understand the true financial disaster that a debilitating injury or illness can cause. Consider a 40-year old independent contractor earning $150,000 annual salary. By the time this person retires at age 65, he will have earned $3,750,000 - a significant amount of income which allows this person to provide for his family, maintain a nice quality of life and save for retirement. Clearly a Long-Term Disability claim extending the full 25 year time frame would be disastrous - but what about a 4 year claim while battling cancer? Is $600,000 worth of lost income significant to this person?
Unfortunately, this is the type of situation people seem to forget about. They can't imagine becoming permanently disabled so they do not consider Long-Term Disability insurance important. How about cancer, heart disease, mental/emotional conditions and the many other diseases/disorders that can prevent a person from being able to work? Regardless of whether a claim lasts 2 years or 20 years, the impact a Long-Term Disability can have on a person and their loved ones can be tremendous and horrifying.
Almost anyone who is in good health can obtain Disability insurance. Do not make the mistake of waiting until you no longer are able to purchase coverage. A person's income is too important to leave up to chance.
Disability insurance may not be a necessity for everyone - however for someone who depends on his/her ability to continue earning an income, Disability Income insurance is critical. For someone who depends on his/her income, Disability insurance is the most effective way of insuring his/her future and also the future of his/her family. Disability Insurance provides income protection against a debilitating injury or illness. If you are unable to perform the material duties of your occupation, Disability insurance will provide you a monthly benefit to assist in replacing the loss of income experienced. There are many different types of Disability insurance and many different provisions a policy may or may not include.
Rather than going into the details of a Disability insurance contract, it is important to understand the true financial disaster that a debilitating injury or illness can cause. Consider a 40-year old independent contractor earning $150,000 annual salary. By the time this person retires at age 65, he will have earned $3,750,000 - a significant amount of income which allows this person to provide for his family, maintain a nice quality of life and save for retirement. Clearly a Long-Term Disability claim extending the full 25 year time frame would be disastrous - but what about a 4 year claim while battling cancer? Is $600,000 worth of lost income significant to this person?
Unfortunately, this is the type of situation people seem to forget about. They can't imagine becoming permanently disabled so they do not consider Long-Term Disability insurance important. How about cancer, heart disease, mental/emotional conditions and the many other diseases/disorders that can prevent a person from being able to work? Regardless of whether a claim lasts 2 years or 20 years, the impact a Long-Term Disability can have on a person and their loved ones can be tremendous and horrifying.
Almost anyone who is in good health can obtain Disability insurance. Do not make the mistake of waiting until you no longer are able to purchase coverage. A person's income is too important to leave up to chance.
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