How
much money do you spend to protect your assets? Most individuals have
automobile insurance, homeowners insurance to protect a home and its contents
and, possibly, additional coverage for items or collections of particular
value. These assets are, without doubt, valued at a sizable amount. However,
their income-producing value is negligible.
Your
true wealth comes from your ability to earn money. The money you earn most
probably pays for everything from the rent or mortgage and property taxes to
the costs of maintaining your home. You have food and clothing to buy, as well
as loan and credit card payments to make. You must pay for the property
insurance noted previously, as well as for premiums on casualty and life
insurance policies. What other miscellaneous expenses do you have? If your
income from employment or your business were to cease suddenly, what financial
resources would be available to you to help pay your ongoing expenses?
Typical candidates for disability protection
Typically,
permanent disability involves a series of hardships that results in an
inability to perform certain work and daily activities for the foreseeable
future. Some professions and occupations are at greater risk, and, therefore,
consideration should be given to purchasing protection that has long-term
income stream potential.
·
Jobs
requiring specialized abilities. Replacing
income without disability income insurance is usually challenging;
comparable pay and work conditions may be difficult to restore. Years of
specialization, vocational training, experience and education are invaluable,
but may become unusable resources if a disability occurs. Occupations that
require physical labor are particularly vulnerable to physical disabilities.
However, physical impairments are just one type of disability. Workers from all
professions are likely to face extreme challenges if an emotional or mental disability affects their usual
functioning.
·
One- and
two-income families. Not everyone
has parents, in-laws, siblings or friends who might offer immediate emergency
financial help or ongoing support. A one-income household is particularly
vulnerable to permanent loss of income. Family situations in which each spouse
covers between 30 percent and 70 percent of total financial needs may be
especially impacted by the loss of one income.
·
Small
businesses. Particularly vulnerable are partnerships and corporations (i.e.,
business enterprises run by two or more owners). If disability curtails the
involvement of one owner, the remaining owner either “carries” the co-owner, or
the business may close. In addition to earnings lost, the disabled business
owner may miss certain planning opportunities, such as preparing for
retirement.
·
High
stress, service and production-oriented occupations. Long hours, deadlines,
quotas and a fast-paced society place a tremendous burden on both mind and
body. Our current emphasis on calorie control, physical exercise, meditation,
relaxation and conscientious dieting are popular stress inhibitors that may
indeed extend our life expectancies. However, every successful, healthy worker
faces the possibility of a disabling accident or illness.
Alternative sources of income
Should
you suffer a disability, you need to know where your income will come from.
Would you have enough in savings to support yourself and your loved ones during
a six-month disability? Do you know someone who would freely lend money to you
if you were to become disabled? Perhaps your spouse can provide the necessary
income, but the burden of being a spouse, parent, private caregiver and
employee can be overwhelming. How quickly could you liquidate the assets you
have insured so carefully?
Group and individual disability income insurance policies
are available to cover most individual concerns and family or business
situations. Careful planning will help steer you toward the proper coverage
that addresses the demands on your current income and the needs of your
family.
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