The Love Runs Deep Part 2: Income Protection Basics
There are so many facts, figures, numbers, and statistics that ultimately make the argument for income protection a no-brainer, and while I feel it's important to share them, facts and figures do not resonate with me so I'm going to throw out what I consider to be the essentials (throw with love, of course).
What the F is Disability Insurance Anyway?
A disability is an illness or injury that keeps you out of work for an extended period of time
Some of the most common causes for disability claims that you may be unaware of are cancer, stroke, pregnancy complications, depression, post partum depression, anxiety, heart attack, diabetes, back pain, arthritis, joint & musculoskelatal disorders, lyme disease, broken bones, and autoimmune disease
Disability Insurance replaces part of your salary if you’re unable to work due to the illness or injury
Worker’s comp does not cover illnesses or injuries unless they are caused on the job
95% of disabling injuries and illnesses are not work related
Social security will only cover you if you are totally disabled and unable to perform any job
Before you can even file a claim you must have been totally disabled for at least 5 months (totally disabled meaning you cannot work at all, whereas in many cases of disability you may be able to work part time or perform some of your job but not all resulting in a loss of income, and still recieve a benefit from your policy)
65% of SSDI claims are denied
It could take up to 2 years to receive a benefit
The average benefit paid is around $1,000 per month (would that cover your expenses?)
"I have it through work"
If you are fortunate enough to have disability coverage from your employer, you should review what you are covered for.
You may not have the coverage you think you have
If your employer pays for your coverage, you'll be taxed on the benefit you get (you already receive only a percentage of your paycheck, usually 50-60%, if you then subtract taxes you may need additional personal coverage to cover the gap)
Depending on the stage of your career, unless you plan on staying at your company until retirement, you CANNOT take your disability insurance with you if you leave
Things to Consider
If you put an income protection plan in place at the beginning of your career, chances are your income has increased just as your financial responsibilities have. You may need more coverage and a review.
If you're at the beginning stages of your career (or have begun a new career), chances are you are not yet earning the income you expect in the future…plans can be customized with options as your income grows and needs change (without having to prove future medical insurability, meaning no need for another medical exam and just in case you become sick you're locked in)
If you are in a profession where you have invested a great deal of time and money such as law or medicine, wouldn’t want to protect that investment?
What This May Mean for You
The younger and healthier you are, the lower the cost of disability insurance (same goes for life insurance)
If you own a business you are responsible for more than just yourself!
If you have a family you are responsible for more than just yourself!
If you live with a significant other and share expenses you are responsible for more than just yourself!
If you are single, you ARE responsible for yourself!
You might want it, but not everyone can get disability insurance!!
Not only do you need the income and income stability, you also have to be in fairly good health (keep in mind if you do have an unfavorable medical history, there are options I could help with)
DI policies vary in cost due to age, health, income, & options; some can be expensive!! Keep in mind policies can (and should) always be customized to fit not only your needs but also what you can afford; having something is always better than having nothing!
Look I realize some of this is a little dry but it's important! As much as we may try to control various aspects of our lives or think if we ignore things they don't exist, this stuff is happening...and it's probably happened to someone you know. As humans on earth in this time we should do everything we can to take care of ourselves emotionally, physically, mentally, and financially so that we can live in the present and enjoy ourselves; part of that is making sure we put things into place that protect what we work hard to create from the stuff we simply we cannot predict.
I am here to serve YOU, so please reach out with questions, concerns, needs, etc.
With Love & Gratitude,