Disability Insurance Myth's
Disability Insurance can provide you with the protection you need. During a prolonged injury or illness, you could loose your income and everything it provides. What are the odds it could happen to you? And what can you do about it - starting now? Make sure that you buy a disability insurance policy to protect your greatest asset - your ability to earn an income.
It won't happen to me.
The truth is that during the course of your career, you are three and a half times more likely to be injured and need disability coverage than you are to die and need life insurance. Source:Health Industry Association of America, 2000
In the last 10 minutes, 390 American's became disabled. Source:National Safety Council, 2001
A fatal injury occurs every five minutes and a disabling injury every 1.5 seconds. Source:National Safety Council, Injury Facts, 2003 Edition
There is a death caused by a motor vehicle crash every 12 minutes; there is a disabling injury every 14 seconds. Source:National Safety Council, Injury Facts, 2003 Edition
Nobody wants to think about it, but you must take steps to protect yourself, your family, and your future from what might happen if you become disabled and could not work. Short term disability insurance and long term disability insurance can help you do just that.
Disability insurance is too expensive.
Individual short disability insurance and individual long term disability insurance solutions are available to suit nearly every need and budget. That' why it makes sense to work with a representative at Disability Insurance Direct who can tailor a program to satisfy your personal situation and objectives.
Whether your goal is maximum income protection, safeguarding specific expenses (mortgage), or budget-based coverage - a disability income insurance policy can be designed to meet your needs.
In fact, disability insurance is one of the less expensive insurance coverages.
Average Annual Cost for Insurance Coverage:
Home - $501
Note: Average costs represent total annual cost, whether paid by insured or employer.
Sources: Kaiser Family Foundation, Employee Health Benefits; LIMRA surveys; NAIC website; Best's Review; 2001-2003 data.
I have a group disability policy, I don't need an individual disability income insurance policy?
If your employer offers a group long term disability (LTD) program or group short term disability (STD) program, it may replace a portion of your income should you become to sick or hurt to work, which typically does not include bonus income or commission income. This can be a valuable income replacement benefit and a good safety net, yet because the benefits are often taxed, some people find their group LTD benefits may not be enough. Group policies are also typically more restrictive with the definition of disability, offer no premium guarantees, can be cancelled at anytime, and typically do not cover partial disabilities.
Disability Benefits Are Taxable If Your Employer Pays The Premium. Can you live on 42% of your income?
Since group disability insurance benefits are usually taxable, even a typical policy covering 60% of your income might not be enough. Individual disability income (DI) insurance can help supplement your group disability benefits to better meet your income replacement needs.
****If you were earning $75,000 per year and had a group long-term disability plan that covered you for 60% ($3750 per month before taxes), after taxes you would end up with only 42% ($2625 per month after taxes) of your earned income assuming a 30% combined tax rate***
An affordable individual disability policy could provide you with a monthly benefit that is income tax free when you pay the premium. For most workers, even those with some employer-paid coverage, an individual disability income policy is the best way to ensure adequate income in the event of disability. When you buy a private disability income policy, you can expect to replace from 50% to 70% of income. Insurers won't replace all your income because they want you to have an incentive to return to work. However, when you pay the premiums yourself, disability benefits are not taxed. (Benefits from employer-paid policies are subject to income tax.)
Social Security will take care of me.
If you became disabled, you may be eligible for Social Security benefits, although according to the Social Security Forum (volume 21, no. 5 - May 1999) more than half of all claims submitted to Social Security are denied.
According to the Social Security Handbook, you are not considered "disabled" or entitled to disabled worker's benefits unless you meet all of the following four conditions.
1. You cannot engage in any substantial gainful activity because of a physical or mental impairment. You must not only be unable to do your previous work, considering your age, education and work experience (It does not matter whether such work exists in your immediate area, whether a specific job vacancy exists, or whether you would be hired if you applied for such work.)
2. Your impairment(s) is determined medically by a doctor.
3. It is expected that your impairment(s) can either result in death or last for at least 12 months in a row.
4. Your impairment must be the primary reason for your inability to engage in substantial gainful activity.
If your claim is approved, there is a six-month waiting period before benefits will begin. Benefits typically replace only a fraction of pre-disability income.
I can do it myself.
Even if you regularly save 10 percent of your income, one year of disability could easily wipe out many years of savings.
Example: If you earn $50,000 per year and save 10% of your income every year for 10 years, a disability that last's only 1 year would wipe out the previous 10 year's of saving's.
What bank would lend you money if you were too sick or hurt and could not work?
Could you maintain your standard of living without placing additional strain on yourself and your family?
Truth is, individual disability insurance makes sense and it makes sense to work with a disability insurance representative.
- The disability insurance representative's at www.AffordableInsuranceProtection.com, a divsion of Financial Solutions Group, Inc., are trained to help you assess your individual disability income insurance needs, your overall financial situation, your tolerance for risk and the type (or types) of insurance that would be most appropriate for your personal situation.
- We will help you understand the complexities of disability insurance policies and riders - and will help you select the features and benefits that are right for you.
- We can be the catalyst in the planning process - bringing together any other advisors you may have, such as your attorney or accountant - then helping form a coordinated planning team.
- At www.AffordableInsuranceProtection.com, a division of Financial Solutions Group, Inc., we will complete the forms necessary to start the underwriting process - and will arrange for any follow-up information that may be required. We will then follow-up with the underwriters to facilitate the process.
- When a policy is issued, we will deliver it to you, explain the coverage and answer any questions you might have.
- We will continue to review your changing disability insurance needs and will be available to help with any service needs that may arise.
- In the event that you suffer a disability, we will be a great resource to you and your family - to help you file your claim.
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