You will probably not win the lottery or get struck by lightning, but you may suffer a freak accident of some sort that lays you up for a while and out of work. If you are in disbelief, take a look at some surprising statistics.
- According to the National Safety Council, 50 folks will find themselves with a disabling injury every minute and with 15 fatal injuries every hour.
- The Social Security Administration reports that one-third of the people entering the workforce today will incur a disability before retirement.
- U.S Census Bureau information indicates that 18% of the population, more than 51 million Americans, are now classified as disabled.
A disability does not have to result from an accident and it can be a temporary affliction. Back problems, cancer and heart disease can all make it impossible for you to show up at work and earn a living. The American Payroll Association informs us that 71% of Americans live from paycheck to paycheck. Given this statistic, even a short-term loss of income can be a disaster for most families and a cause a major dent in the wealth of others.
That being said, the good news is income insurance is not expensive. Accidental death and dismemberment policies can be had for pennies a day. Some words of caution: Do not confuse accidental death and dismemberment policies with bona fide Disability Income Insurance. This kind of policy is there to protect you against loss of earnings because of disability from any injury or illness and is also reasonably priced. It is definitely worth your time to research the advantages of such policies given the downside of income loss due to unforeseen circumstances.
Only 10% of injuries occur on the job, so Workers' Compensation doesn't apply to 90% of disabling calamities, and Workers' Compensation is pretty thin coverage at best. One of five workers are disabled before retirement for a year or more, and one in seven will find themselves out of work for more than 2.5 years due to disability.
Of course there is always disability income from Social Security, right? Only 39% of applicants are approved for SSDI, and the average benefit is only $1,004 a month. Will that take care of your family and keep you in your home? Nearly 50 percent of all mortgage foreclosures are caused by loss of income due to disability, and only 2 percent are caused by death. You insure your life, but you are 200 times more likely to lose your income than your life.
You may be covered by group disability insurance by your employer as a part of the regular benefits package or perhaps you can elect the coverage and pay for it. Please know, though, that not all disability coverage is the same. There are many employer-sponsored plans that are purposefully limited to short-term coverage lasting around six months. Long-term coverage can last from five years until age 65 and may cover 60% of your income, minus commissions and bonuses. Since long-term disabilities are the exception, the premiums for this type of coverage are very reasonable considering the benefits provided by such policies.
You have probably secured your family from the financial aspects should you die resulting in loss of income, but what if you lose your income and don't die? Life is a crap shoot. Disability Income Insurance will actually replace a large part of your earnings should an injury or illness befall you that precludes you from going to work. It can also pay for most of your monthly bills while you are healing. This type of insurance policy goes a long way to save your home, your family and yours and their future. Nobody plans on an accident causing long periods of recuperation, but you can do something to prepare for such a calamity.
- According to the National Safety Council, 50 folks will find themselves with a disabling injury every minute and with 15 fatal injuries every hour.
- The Social Security Administration reports that one-third of the people entering the workforce today will incur a disability before retirement.
- U.S Census Bureau information indicates that 18% of the population, more than 51 million Americans, are now classified as disabled.
A disability does not have to result from an accident and it can be a temporary affliction. Back problems, cancer and heart disease can all make it impossible for you to show up at work and earn a living. The American Payroll Association informs us that 71% of Americans live from paycheck to paycheck. Given this statistic, even a short-term loss of income can be a disaster for most families and a cause a major dent in the wealth of others.
That being said, the good news is income insurance is not expensive. Accidental death and dismemberment policies can be had for pennies a day. Some words of caution: Do not confuse accidental death and dismemberment policies with bona fide Disability Income Insurance. This kind of policy is there to protect you against loss of earnings because of disability from any injury or illness and is also reasonably priced. It is definitely worth your time to research the advantages of such policies given the downside of income loss due to unforeseen circumstances.
Only 10% of injuries occur on the job, so Workers' Compensation doesn't apply to 90% of disabling calamities, and Workers' Compensation is pretty thin coverage at best. One of five workers are disabled before retirement for a year or more, and one in seven will find themselves out of work for more than 2.5 years due to disability.
Of course there is always disability income from Social Security, right? Only 39% of applicants are approved for SSDI, and the average benefit is only $1,004 a month. Will that take care of your family and keep you in your home? Nearly 50 percent of all mortgage foreclosures are caused by loss of income due to disability, and only 2 percent are caused by death. You insure your life, but you are 200 times more likely to lose your income than your life.
You may be covered by group disability insurance by your employer as a part of the regular benefits package or perhaps you can elect the coverage and pay for it. Please know, though, that not all disability coverage is the same. There are many employer-sponsored plans that are purposefully limited to short-term coverage lasting around six months. Long-term coverage can last from five years until age 65 and may cover 60% of your income, minus commissions and bonuses. Since long-term disabilities are the exception, the premiums for this type of coverage are very reasonable considering the benefits provided by such policies.
You have probably secured your family from the financial aspects should you die resulting in loss of income, but what if you lose your income and don't die? Life is a crap shoot. Disability Income Insurance will actually replace a large part of your earnings should an injury or illness befall you that precludes you from going to work. It can also pay for most of your monthly bills while you are healing. This type of insurance policy goes a long way to save your home, your family and yours and their future. Nobody plans on an accident causing long periods of recuperation, but you can do something to prepare for such a calamity.
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For additional information on roth IRA conversions, 403(b) rollovers, or any other wealth management topics, please visit Kennard Wealth Management Group of Ann Arbor.
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