By: Mark D. Milbrod, CLU, CLTC
May is Disability Income Awareness Month. As a life insurance professional specializing in solving a number of planning issues revolving around someone’s death, it is easy to forget about the importance of providing Disability Income along the way.
After all, we are in the business of risk management and the likelihood of a health event causing someone to lose income is statistically higher than for a premature death triggering a life insurance claim. Just over 1 of 4 of today’s 20 Year olds will become disabled before they retire. And accidents are not usually the cause. Back injuries, cancer or heart disease lead the way to the majority of long term absences from the workplace. In addition, most situations are not work related and therefore not covered under worker’s compensation.
With the average disability claim lasting just over 34 months, the large majority of Americans do not have adequate savings set aside to make up for lost earnings during that timeframe. Here are some additional statistics from the American Council of Life Insurers, Federal Reserve and The Social Security Administration:
- At least 51 million working adults in the United States are without disability insurance other than the basic coverage available through Social Security.
- Only 48 percent of American adults indicate they have enough savings to cover three months of living expenses in the event they’re not earning any income.
- Almost half of American adults indicate they can’t pay an unexpected $400 bill without having to take out a loan or sell something to do so.
Clearly, there are huge financial consequences that come with not planning for an event like the loss of income due to a disabling event.
Anyone that is on any form of social media can attest to the sad stories we see about someone in our community that was in an accident or became suddenly ill. Often times, a Go Fund Me page is established to help that family who is so desperately in need of financial assistance. The insurance plans that we offer can be that ultimate Go Fund Me page.
At ASG, we have access to the top Disability Income providers. Similar to the Non-Medical programs available for life insurance, there is even a way to provide high limits of Disability Income protection non-medically as well. There are many ways to structure a plan with different elimination periods, plan durations and optional riders such as Cost of Living Increases and Guaranteed Future Purchase Options. With all of the options available, you will be surprised just how affordable this important coverage can be. Get into the habit of requesting a proposal, especially if you are already quoting a life insurance plan.
In the spirt of Disabiity Awareness Month, Don’t forget about Disability Income – It is One More Arrow in Your Quiver!!!