Part 1 – DI The Problem

Unfortunately, statistics tell us that many people will become disabled over the course of their working lives. To protect against the financial damage that long periods of time without income can cause, most experts recommend purchasing disability insurance. Many people are covered by disability insurance policies through their employers, and many others supplement that coverage or simply buy their own disability insurance policies. Be sure to know the details of any disability insurance provided by your employer and to keep in mind that disability payments you receive from an employer’s plan may be taxable as income, while payments you receive from a disability insurance plan you purchase yourself are tax-free.

Fact 1 – An individual who is currently 30 years old has an almost 47% chance of incurring a disability lasting 90 days or longer prior to age 65. (Source: Casualty Actuarial Society) 

Fact 2 – At no age is the risk of death greater than the risk of becoming disabled.  (Source: Casualty Actuarial Society)

Likelihood of Disability over Death before age 65:

                                                Age                   Likelihood

                                                30                     4.1 times

                                                40                     2.9 times

                                                50                     2.2 times

Fact 3 – Over 18 million Americans age 16 to 64 were unable to work because of a disability in 1997.  (U.S. Census Bureau – Americans with Disabilities)

Fact 4 –  Most people have savings to cover less than six months of expenses.  (Source: Casualty Actuarial Society, Business Almanac)

Fact 5 – 48% of all home foreclosures are the result of disability, while only 3% result from death.  (Source: Casualty Actuarial Society, Housing and Home Finance Agency-U.S. Government)

Disability income insurance protects perhaps your greatest asset – the ability to earn a living.  If an illness or accident leaves you unable to work, how will you continue to meet regular expenses?  Where will the money come from to pay for rent or the mortgage, food and living expenses, and other debts? When considering your disability income need, ask yourself the following questions:

• What is my occupation?  Based on Occupational Classifications, certain occupations are eligible for more coverage than others.
• What is my annual earned income?  Accurate financial information is essential to determining how much income protection an individual really needs.  Just as with a home or car, the value of the asset (the income lost) must be established.  Remember, too, that if you pay the premiums (instead of your employer), benefits are income tax-free.  Therefore, it may be necessary to protect only net, rather than gross, income.
• How much income will I need during disability, and how long can I survive financially beforebenefits begin?  Your cash and liquid assets, as well as any other potential income sources (group disability insurance, workmen’s compensation, personal savings, vacation or sick leave), determine this.
• How long should my disability benefits continue?  The longer the benefit period, the greater the cost.  Benefit periods can be as short as one year, or can extend to age 65.

Is Your Greatest Asset Protected?

Statistics show that one in five Americans has a disability.  More than half of those with disabilities are female.  And although men consistently experience more injuries, women experience more loss of productive days due to illness or injury.*

As a working woman, your greatest asset is standing in your shoes.  It’s your earning power, the most valuable asset you own.

It provides the foundation upon which all of your other assets – home, car, education and investments – are supported.  While those assets are readily insured, your ability to earn an income is often overlooked.  But what if sickness or injury prevents you from earning a living?

Have you considered Disability Income Insurance?

The most reliable way to provide an income for yourself or your family during a disability is a disability income policy.  It can provide coverage in the event of a total or partial disability, replacing lost income or covering business overhead expenses. 

Jans, L., & Stoddard, S. (1999). Chartbook on Women and Disability in the United States.  An InfoUse Report. Washington, DC: U.S. Department of Education, National Institute on Disability and Rehabilitation Research.