Disability Insurance- do you get it?

A quick but informative story from one of our agents at Quotebroker Insurance Services:

I had a conversation today with a prospective client who had been told he should look in to disability income protection, but he just didn't "get the point" of the coverage. I thought it may be helpful to give the 60 second guide to Disability Income Protection.

Disability income protection insurance does exactly that- protects your income.  This type of insurance is lifestyle protection- It protects everything you do- the car you drive, the house you live in, the restaurants you dine in.  If you were injured and couldn't work, imagine the lifestyle changes you'd have to make.


But at what cost?  On average, Disability Income Protection insurance will cost you 3% of your gross income yearly.  So if you were offered a job at $100,000 yearly and if you become sick or disabled you would be offered "Best Wishes" from your company or a job that offered $97,000 yearly and if you were to become similarly disabled you'd received about $60,000 yearly- which would you take?

It's a no-brainer, but many forgo the opportunity to purchase this vital product until it is too late.  As with most insurance products, the costs rise as you get older so purchasing a policy sooner rather than later is in your best interest.  Protect what you have now or give up all you have later.

Are you Saving for Retirement now or later?

Most Americans retirement savings plan is based on many large contributions in their later working years, which they consider to be their highest income earning potential. But what happens if the best case scenario is disrupted or fails?

According to a 2007 study by the Council for Disability Awareness, 60% of workers have never discussed how they would handle a loss of income due to disability. For those workers who did, 83% feel highly confident that they will be able to maintain their current lifestyle during a disability period. Is this practical thinking when 70%* of working Americans do not have enough savings to meet short term emergencies?

Disability Income protection should be considered in everyone's best case - worse case retirement planning scenario. Most disability insurance policies today are more affordable at younger ages and premiums will remain level throughout your working years. As you become older and your health begins to decline (the time you may need coverage the most), you may not be able to afford or qualify for coverage.

Your income is your most important asset, not your home, boat or car. Insure that asset with a quality disability insurance product from a respectable carrier. Look for a policy that will also continue to make your annual retirement contributions (Retirement protection Plan), separate from the monthly income you may receive, due to a disability. For more information regarding this subject, contact QuoteBroker.

* = National Investment Watch, AG edwards 2004

What is your most important asset? - It's not your home.

Your ability to work and earn a living may be your most valuable asset. Would you be able to maintain your standard of living if you were too sick or too hurt to work? Probably not. According to Business Almanac, most people's savings wouldn't cover six months' worth of expenses.

If you are in an accident, become ill and cannot earn a paycheck, how will you pay your mortgage, car payment, utilities, and living expenses? Most Americans are financially prepared for death, but they have not prepared for the possibility of not being able to work. Yet, the probability of becoming disabled and unable to work between the ages of 35 and 65 is significantly higher than dying.

Disability strikes one in four workers before age 65. The financial repercussions of disability can be disastrous. According to the US Department of Housing and Urban Development, 46% of conventional mortgage foreclosures were attributed to disability and only 2% to death.

That's why disability income insurance is one of the most important parts of any financial plan. It can help assure that you and your family will have the income you need to live on--and that your retirement savings will continue to grow. Experts advise consumers to be prepared to pay 2-4 percent of your annual income in premium payments. The younger you purchase this benefit, the less expensive it will be.

Look for more upcoming information discussing disability insurance.