A long-term disability can have a devastating impact on a family’s finances. When you become sick or injured and cannot work, not only could you lose your income, you could lose all of your savings, investments and other assets as well. Without a steady income, you’d eventually have to tap into these assets to pay for your costly medical bills, your mortgage, utilities and other daily expenses.
Luckily, Disability Income (DI) insurance can offer your family much-needed financial protection in this scenario. But if you’re young and healthy or if your spouse also works, you probably assume you have no need Disability Income. You couldn’t be more wrong. Here are five of the most common Disability Income myths disproved:
Myth #1: I’m too young to buy DI insurance.
You would be surprised to learn how many young adults suffer from a long-term disability. According to the Social Security Administration, nearly three in 10 of today’s 20-year-olds will become disabled before they reach the age of 67. On top of that, you are five times more likely to become injured during your working years than you are to die before the age of 65, according to a study by Great-West Life.
In other words, you are never too young to suffer from a long-term disability, which means you’re never too young to purchase Disability Income insurance.
Myth #2: I don’t need DI because I’m healthy as a horse.
As we all know, good health can come and go like a flash of lightning. Even people who eat well, exercise and take great care of themselves can suffer from a stroke, cancer, a neurological disorder or an unexpected accident.
Myth #3: Only people with high-risk jobs need DI coverage.
Far too many people are under the impression that Disability Income is most often paid out to blue-collar workers who are injured in a workplace accident or professionals who are disabled in a car accident. Therefore, people who work from home or at a computer desk in a comfy office assume they don’t need DI coverage.
The truth is that non-work-related accidents or jobsite injuries are not the primary causes for worker disabilities. Most workers are disabled by a chronic disease, such as cancer or musculoskeletal problems, conditions that can strike anyone, anywhere, any time.*
Myth #4: If I were disabled, my spouse’s income would cover us.
If your spouse works, you might assume his or her income would be enough to pay the bills for a few months if you were sick or disabled. If your spouse doesn’t work, you might think he or she could find a job if something happened to you.
However, don’t you think if you were diagnosed with a disease or seriously injured, your spouse would rather be caring for you than running out to find a job or working overtime to pay the bills? Typically, if a family has DI insurance, both the injured worker and the spouse end up living off of the insurance benefit even if the spouse was working previously.
Myth #5: I don’t need DI insurance because I’m covered through my company’s group policy.
Although many workers receive Disability coverage through their company, it might not be enough. Most group DI insurance contracts will cover only a percentage of your salary (usually 50%-60%) and the benefits are usually fully taxable. Would your family really be able to live off of just 60% of your salary, especially considering that you might be facing some lofty medical bills? Probably not.
Most financial experts recommend that you go ahead and take advantage of your company’s group coverage if they offer it, but also buy individual coverage to fill in the salary gaps.
As you can see, everyone stands to benefit from Long-Term Disability coverage. Without coverage, an unexpected disability could end up crushing your family’s finances.
* http://www.investors.unum.com/phoenix.zhtml?c=112190&p=irol-newsArticle&ID=1138518&highlight=
