Is Your Income Safe?

We are all well aware that we are in a big economic recession and that it has severely impacted our personal savings and investments. What we may not be considering is the effect that it can have on our ability to survive the loss of income because of a disability.

What is the risk of a disability? If you ask the U.S. Commerce Department, one person in seven can expect to be disabled for five years or more before they retire. An example from the Life and Health Insurance Foundation for Education (LIFE) states that a 25 year old earning $50,000 a year who has a long term disability could lose $3.8 million in future earnings. That, my friends is a lot of money.

Again according to LIFE, more than a quarter of working Americans say they would have trouble supporting themselves financially after losing their income to a disability. Of that number 49% would not be able to do so after only one month.

So, what can you do? Unfortunately many people think that they can rely on their State run Social Security Disability insurance. However, in order to qualify for benefits the worker must be disabled for five months and have the disability be expected to last at least twelve months. In addition, the worker must not be able to perform any occupation and not just the type of work they were doing when they became disabled. In fact, around two thirds of claims are turned down initially.

The best thing you can do is purchase a Disability Income Insurance policy. There are a wide range of options you can buy that can allow you to design a policy that is based on your individual situation. Yes the premiums can seem expensive compared to your homeowners’ policy, but compared to what you could lose they are cheap.

For more information go to www.pennyinsuranceagency.com.
blog comments powered by Disqus