People generally agree that their most important financial asset is their ability to go to work every day and earn a living. Statistics show that one in five twenty-year-olds can expect to be unable to work–either partially or totally– for an extended period of time due to an illness or injury at some point before they reach retirement age. It is therefore essential to properly protect this most important financial asset.
One need not be in a wheelchair or in a coma to need disability income protection coverage. Common illnesses that can cause prolonged partial or total disability and loss of income include cancer, heart disease, migraines, diabetes, arthritis, chronic Lyme disease, Crohn’s disease, colitis, back problems, and many respiratory, neurological and autoimmune disorders.
If a forty-year-old, for example, earning just $100,000 a year should become unable to work due to illness or injury, the potential lost income to age 67 would be over $2.7 million; and if an individual earning $200,000 a year should become disabled due to illness or injury, the potential lost income to age 67 would be over $5.4 million. As you can see, one’s ability to go to work every day is an important financial asset to protect!
Unfortunately, many disability income protection plans have loopholes in them so that, if one does not get disabled in just the right way, there is no coverage. These flaws often exist even in plans offered by one’s professional associations, employers and trusted advisors. One example is the common loophole requiring the individual to be totally disabled first before being able to receive disability benefits for partial/residual disability. Another is lack of indexing so that, if one is on a partial disability claim and their income gradually increases over time due to nothing more than inflation, the benefits decrease. These and other flaws can prevent the individual from obtaining their proper benefits. Therefore, it is essential to obtain coverage without such flaws.
Protecting one’s income does not have to be expensive. But, it is important that it is done properly.