If you are like 65% of the working population, you have never considered this question.
Take a minute to review the following statements.
|My investment income represents more than 50% of my total income.||True||False|
|My children will not need my financial help for their education.||True||False|
|I am prepared to sell my home in the event of financial difficulty.||True||False|
|If I were disabled, the government would take care of me.||True||False|
|I have no expensive hobbies.||True||False|
|I do not know anyone who has been disabled for a month or more.||True||False|
|My family would happily pay for all my living expenses if I could not.||True||False|
|My mortgage payment is less than 10% of my total income.||True||False|
|I could afford to take a two-year vacation.||True||False|
If you answered “false” to any of the above questions, then disability insurance may be very important to you. In fact, anyone who works to earn an income and depends on that income to provide for their living and lifestyle expenses needs disability insurance. So, why does 65% of the work force not have any form of private disability insurance? When questioned, the number one answer was that nobody ever talked to them about it!
Most people own life insurance and understand the value it provides. They know that a premature death could have serious financial consequences for the people who depend on them. Perhaps these people should consider how different the consequences would be if they were to become permanently disabled. Wouldn’t their dependents be in a worse position than if they had actually died? Not only would their income stop, but they would become a financial drain on the scarce resources available to those dependents. This drain would take the form of both on-going living expenses and the additional cost of medical expenses for the disabled person.
Beyond the financial problems of disability are the psychological implications. When a person becomes disabled, initially there is sympathy for the disabled person. As time goes by, this sympathy can develop into resentment. It’s human nature. And certainly there is the personal impact of the loss of dignity that a former productive and self-sustaining person will feel. The old lifestyle is quickly replaced by “no lifestyle”, and friends and family drift away as they get on with their lives.
So what is disability insurance? Simply stated, disability insurance policy is much like a life insurance policy. However, rather than on death, it pays during disability. And rather than a lump sum benefit, it pays a monthly benefit while the policy’s definition of disability is being satisfied.
The title of this article asks the question, “Is disability insurance important to you?” The answer to this question is: that for 1 in 4 people, it could be one of the most important life-changing decisions they will ever make …for both themselves and their loved ones (1 in 4 people are disabled for 90 days or longer during their life time).