Wednesday, January 2, 2008

The Need for Disability Income Insurance

Becoming disabled, whether permanently or temporarily, can be disastrous to one’s personal finances. Although most people think of disability as being confined to a wheelchair or a bed (typically permanent disabilities), temporary conditions can be just as disabling as permanent disabilities. As such, it should be apparent how important it is to protect your self from the perils of such a devastating event.

According to the “Commissioner’s Individual Disability Table A,” the following statistics have been reported :

  • One in three employees will become disabled for 90 days or more before the age of 65.

  • One in seven employees will be disabled for five years or more before retirement.

  • At age 32, disability of three months or longer before age 65 is six times more likely than death.

Further, according to a recent report from the Department of Housing and Urban Development:

  • One out of eighteen mortgages is not paid due to a disability of the mortgage holder.

  • Almost sixty percent of disability claims are denied by the Social Security Administration.

Such facts are scary and underscore how devastating a disability can become to a person’s finances. Yet given such data, people continue to place more emphasis on obtaining life insurance over disability income insurance. Clearly, both types of coverage are necessary in most cases, to ensure an adequate financial plan has been put into place. However, the statistics don’t lie: ODDS ARE THAT YOU HAVE A BETTER CHANCE OF BECOMING DISABLED THAN YOU DO OF DIEING!

The purpose of my message is not to preach, but to make you aware of the importance of looking more closely at the oft-over-looked disability income insurance coverage. Most employers offer some type of group disability income insurance coverage, so look into enrolling during your benefits open enrollment period. Given the statistics mentioned above, you may be glad you did someday.

DISCLOSURE: I am in no way suggesting or providing any specific or general financial planning or investment advice through this article and I disclaim any assertion to the contrary. The information provided is for informational purposes only. Prior to making any important financial decision, please consult a qualified, licensed professional to discuss your specific situation in detail.

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