Why You Should Buy Key Employee Disability Insurance (Sooner Than Later)
There are 4 main reasons to own disability insurance:
1. The chance of a disabling illness or injury is real.
2. Your ability to earn an income is your greatest asset.
3. To maintain your standard of living in the event a disability strikes.
4. The only way to guarantee income to your family if you become disabled.
The Chance of a Disability
The likelihood that a disabling injury or illness will strike any individual prior to age 65 is higher at every age than the likelihood of death. If that is true, why do most working individuals own some form of life insurance protection but over 70% have no disability income insurance.
How many people have a disability?
An estimated 19.4% of noninstitutionalized civilians in the United States, totaling 48.9 million people, have a disability. Almost half of these people (an estimated 24.1 million people ) can be considered to have a severe disability.
Source: McNeil, 1993
Survey: NHIS, 1992
Your Ability to Earn an Income is Your Greatest Asset
What is your greatest asset? Is it your home or your retirement account or family? For most of us, our greatest asset is our ability to earn an income and provide for our family. In fact, without your earnings ability, how could you continue to pay your mortgage, fund your retirement or pay for family vacations? The obvious answer is that without your income, none of these things is possible. For this reason disability insurance is an absolute necessity.
To Maintain Your Standard of Living in the Event a Disability Strikes
When disability strikes, mortgage payments, utilities, food and other necessities of life are still required to live and survive. These bills will still be due even though pre-disability income will no longer be available. Without adequate disability insurance, how will the payments for the necessities of life be maintained? The answer is that they will most likely not be maintained. In fact, almost 50% of the mortgage foreclosures in the US today are the result of a disability. Are you prepared?
The Only Way to Guarantee Income in the Event of a Disability
Disability insurance is the only way to guarantee income to your family if you become disabled and are unable to work and earn an income. If a disability occurs and there is no insurance protection, there may be temporary sources of funds to replace income. Some of these sources may include savings accounts, investment funds, real estate income and the sale of assets. However, monthly expenses must continue to be paid even when these temporary sources of funds have long been exhausted. Once your assets have been liquidated, where will the funds needed to live come from in the event you suffer a disabling illness?
The most cost effective solution to protect your most valuable asset is disability income insurance. The probability for a disabling accident or illness is greater than death for all ages under 65 and if a disability strikes, the costs of living will continue whether you can work or not. You may have some assets that can provide temporary income during a period of disability but these assets are likely to run out over the long term. Therefore, the only way to guarantee that income will be available in the event of a long term disability is a disability income insurance policy.