Don’t Let a Disability Cripple Your Family’s Finances

You probably understand the important role that life insurance can play in helping provide for your family in the event of an untimely death. But did you know that a 40-year-old man is three times more likely to suffer a disability than to die? The risk of disability for a 40-year-old woman is six times greater than the risk of death.¹

A disability can send expenses sky-high while drastically reducing income, placing a newly disabled breadwinner’s family in a difficult position. One way to help protect against the financial ruin that a disability can bring is through disability income insurance.

Insuring Your Income

A disability income insurance policy can replace some of your salary, up to the policy limit, if you should suffer an illness or injury that makes it impossible for you to continue working. The benefits of an individual policy can last for a set number of years or until you reach retirement age, and they usually are not taxable if you paid the premiums yourself.

Some disability insurance policies pay a benefit if you are unable to perform your current occupation, whereas others pay out only if you are unable to perform any type of job. Although many employers offer group disability plans, the benefits from these plans may replace a smaller portion of income than is possible with an individual policy. Furthermore, benefits from an employer-provided disability policy are generally taxable.

Most people insure their cars, homes, and expensive jewelry. Consider insuring what may be your most valuable possession: your ability to earn a living.

1) 2009 Field Guide, National Underwriter

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.