Protect Your Income with Disability Insurance

Many people feel that a disability will never happen to them. However, the statistics tell a different story. According to the Life Foundation, a nonprofit organization, nearly one in five Americans will become disabled for one year or more before the age of 65.  The number of workers who become disabled has risen by 35 percent since 2000, according to the Social Security Administration.

Here are a few questions to ask yourself if you are unable to work because of a disability:

• What would happen to my income if I was unable to work?
• How would my family maintain their lifestyle?
• How would every day bills such as the mortgage, car payments and basic living expenses be paid?
• What happens to my retirement savings and other financial goals such as a child’s education?

To answer these questions, a good first step is to build a six month cushion in a liquid savings account. The next step would be to consider disability insurance. Many people do not buy disability insurance for fear it is too expensive. But consider the risk that you are exposed to if you lose your greatest asset- Your ability to earn an income.

As with all insurance, the best time to purchase coverage is when you are young, healthy and don’t need the coverage. Disability Insurance is transferring a large risk on to an insurance company in exchange for a premium. The premium will depend on a number of factors including age, occupation, health history and amount of income being insured. Be sure to work with an independent insurance professional. He or she can help you navigate the waters and find the insurance company that is most appropriate for your specific situation. Working with an agent who is captive to one insurance company may limit your disability insurance options.

For small business owners, not only is individual disability insurance critical, but also Business Overhead Expense coverage. This coverage allows a business to keep running while the owner is disabled and paying for day to day expenses as well as replacement staff. Finally, in certain instances, if a business insures three or more employees, there can be savings of up to 50 percent per person.

Disability is a major risk that should be protected as you would your house or your car. Contact your independent insurance agent to learn about your options for this critical coverage.

Securities and advisory services offered through SII Investments, Inc. (SII), member FINRA/SIPC and a Registered Investment Advisor.  SII Investments, Inc. and Peabody Financial Services, Inc. do not offer tax advice and are separate and unrelated companies