Disability Insurance can help you too.
New Year’s Eve for the Reids is a family affair. So when Bill Reid didn’t show up at his sister Michelle’s home, everyone was worried. Around 9 p.m., a call to an area hospital confirmed the family’s fears. Bill had been in a horrific car accident. Another motorist hit Bill’s car head on, driving it through a brick wall and trapping him in his car for 90 minutes.
It took almost two years for him to walk unassisted.
Bill, then 32, sustained multiple bone fractures, lacerations to his liver and colon, and a brain injury that put him in a coma for five weeks. He underwent 13 surgeries and spent seven months in the hospital and rehab center. It took almost two years for him to walk unassisted.
The brain trauma, however, left Bill with chronic, short-term memory loss, which made it impossible for him to return to work. Fortunately, he had planned ahead with the help of his brother-in-law, James Hasley, CFP, CLU, ChFC, an insurance professional. James had sold Bill an individual disability insurance policy when Bill was just 26, and later helped him add more coverage as his earnings increased. When Bill changed to a job that offered an employer-paid disability insurance benefit, he kept his individual coverage for the added protection.
Because of Bill’s wise decision, his income is roughly the same as it was before the accident and will continue until age 65, allowing him to stay in his home and lead an active life.
Before the accident, Bill had also purchased two life insurance policies. Because they included disability waiver of premium riders, the insurance company now pays all of Bill’s premiums. The whole life policies are accumulating cash values that will provide Bill with financial security later in life.
3 Reasons You Think You Don’t Need Disability Insurance (But Actually Do)
Most people, if asked, are hard pressed to explain what disability insurance really is. It’s actually pretty simple to define: Disability insurance protects your paycheck.
If you become injured or ill and can’t work, disability insurance pays you a portion of your salary until you can return to work. A Life Happens survey found that most people couldn’t make it a month without their paycheck before financial difficulties would set in. So, it’s easy to see how important disability insurance is.
“That’s all fine and well,” you say, “but here’s why I don’t need it.”
Reason #1: “I’m young and healthy. A disability will never happen to me.”
Truth: You actually have a three in 10 chance of suffering a disability that keeps you out of work for 90 days or more at some point during your career, according to a Life Happens survey. You just don’t know which side of that statistic you’ll be on.
Reason #2: “I could rely on government benefits.”
Truth: Most long-term disabilities are a result of an injury or illness that is not work-related, and so wouldn’t qualify for Workers Compensation. And if you’re counting on Social Security disability benefits, those pay an average of $1,100 a month, which would leave you living right around the poverty level.
Reason #3: “I have disability coverage through work.”
Truth: You may, but it’s more than likely you don’t. Most (70%) private employers don’t offer long-term disability insurance, according to the U.S. Department of Labor.
The bottom line is this: If you work and rely on your paycheck, you need disability insurance.
Do you have any questions how we can help you with Disability Insurance? Give us a call at: (956) 255-9502