Auto insurance is
designed to protect your car against damage and could help pay medical bills if
you’re injured in a car accident. Depending on your coverage, it also may pay
for lost wages if you’re unable to work. But if you’re driving around thinking
most disabilities are caused by accidents, you may be headed for a crash course
in reality.
What proportion of
disabilities are caused by accidents? Half? More than that? Fasten your
seatbelt. According to the Council for Disability Awareness, the number is more
like 10 percent.
While car insurance
may help with some of your medical bills and lost wages, it offers no
protection in the face of illnesses including cancer, heart disease and
diabetes, which account for 90 percent of all disabilities.
So you’re taking
steps to ensure your car is protected, but how are you protecting yourself and
your income against most disabilities?
Will
the odds of becoming disabled catch up with you?
If you’re wondering
whether this is a big deal, you might want to check your rear-view mirror. The
odds could be catching up with you.
One in four Americans
entering the workforce today will become disabled before they retire, according
to LIMRA, a worldwide insurance research, learning and development organization.
The Social Security
Administration reports that 37 million Americans are disabled, and 50 percent
of them are in their working years, between the ages of 18 and 64.
The average U.S.
disability claim is 31.2 months. Imagine being out of work and not getting paid
during that time.
About 65 percent of
working Americans could not cover living expenses for one year if their income
was lost, and 38 percent couldn’t cover those expenses for even three months.
If you’re like most
people, your savings would provide about as much cushion in the event of a
disability as your car’s airbag would in a collision. That money would help you
survive the initial blow, but not the next two-plus years. And once you use it,
it’s gone.
This
could be the most important type of insurance
Enough
bad news. The good news is, there’s a type of insurance that can protect the
money you’ve saved — and the money you’ll earn in the future — in the event
that you become disabled.
Disability
income insurance provides replacement income when you are unable to work as a
result of an extended illness or injury. That income would allow you to pay
your mortgage or rent, car payment and daily expenses.
This
insurance comes in two main types: employer-sponsored (or group) policies and
private policies. Group policies are usually less expensive but they can have
gaps in coverage compared to what private policies offer.
If you
already have a group policy, that’s great. Just make sure it will provide
enough money to meet your spending needs. You may need to supplement group
coverage with private coverage. And remember, a group policy usually is tied to
your job. A private policy will follow wherever your career takes you.
Riders
and other policy details can complicate a decision on disability insurance.
Consumer advocates recommend working with an insurance professional to ensure
you get the policy that best meets your needs.
It
could be argued that disability income insurance is the most important type of
insurance you can carry. That’s because disability income insurance protects
your most valuable asset: your ability to earn an income.
https://www.fulfillinglife.com/insight/consider-disability-income-insurance/
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