Broker Check

Disability Insurance

How long could you stay the course if you lost your ability to earn your present income?

Simply put; a disability is the inability to pursue an occupation because of a physical or mental impairment.

Most of us would not argue that insuring our valuable assets is a wise decision. We insure our homes, our cars, our jewelry and our lives without question but often we miss our most valuable financial asset: our ability to earn an income. Protecting your ability to earn just makes good common sense.

According to the Insurance Information Institute, an individual between the ages of 40 and 65 has a greater chance of missing at least three months of work due to an accident or illness than of suffering an untimely death. Indeed, the average recovery period runs a lengthy two and a half years.

Many employers will provide coverage for a percentage of an employee’s base salary, such as 60%, yet this may not include your commissions, bonuses or other incentive based compensation. With this in mind would you still be able maintain your short and long term goals if disabled.

The first step to determining your needs in the event of a disability is to objectively analyze how a short or long-term disability would affect your overall financial plan. This should include analyzing your needs as well as available dependable resources. This information can help you to make an educated and well thought out decisions on how to protect yourself and your family in the event of a disability.

A few considerations are:

How much coverage do you have through your employer?
Will it cover you if you can’t perform the duties of your present occupation?
Will the benefits you receive be taxable?
Will the benefit cover your total earned income or just your base?
What is the insurance provider’s definition of disability?
If you change jobs will you lose your coverage?
Should you consider securing your own coverage?
If you are self employed you will have different needs and programs to consider.
It is important to know that individual disability insurance contracts can be specifically tailored to help meet your personal needs. Since features and benefits can vary widely from policy to policy, you should consult with an advisor who can help you to assess your needs and help you to make an informed decision.

We understand without proper protection planning your way of life might be at risk should you become disabled. One of our wealth advisors can help you to objectively analyze your needs and, if appropriate, help you in selecting and implementing a suitable program.

While no one likes to think about worst case scenarios it is always helpful to be prepared for them and therefore be better positioned to focus on the things you most enjoy in life.

If you would like further explore your needs and schedule a complementary meeting with one of our Wealth Advisors please e-mail one of our advisors directly or contact us at tim.weiner@lpl.com