Ensure your income keeps flowing — even if life takes an unexpected turn
Disability insurance (DI) serves as protection against an illness or injury that may result in loss of income for a period of time. Or - DI is often overlooked, yet it's one of the most critical pieces of financial protection against an illness or injury that may result in loss of income for a period of time. Without income protection, financial flow to other bills can be a challenge if you cannot work. Help protect your assets by creating a strong foundation with income protection.
Why is it a good choice?
According to a survey conducted by LIMRA, 61% of consumers said they would feel the financial pinch in a year or less without their income — and about 50% indicated they would feel the pinch in six months or less.1 Do you fall into one of these categories and if so, would you benefit from the paycheck protection that DI offers?
Addressing DI needs:
- Paycheck insurance: How long could you afford to pay your basic monthly living expenses if you were unable to work due to a sickness or injury?
- Mortgage insurance: How long could you continue to pay your mortgage if you were unable to earn money?
- Retirement protection: Would you have to borrow money from your retirement savings if you were disabled for longer than six months?
- Protection of the family unit: How would your family’s lifestyle be impacted if you were unable to earn an income?
Reasons to consider DI
Protecting your hard-earned income is essential to maintaining your current lifestyle and ensuring financial security in the future. Leveraging disability insurance as an economic tool provides income protection for an unexpected illness or injury. Below are some reasons you may want to consider implementing this type of plan into your overall financial portfolio.
- Primary asset: Just as you insure your home and auto, you should also protect your paycheck—your most important asset. Your income supports all expenses, so insuring it is vital for financial stability.
- Flexible design: This coverage allows you to tailor a plan to meet your specific and unique needs based on your profession.
- Portable: Permanent coverage that you can retain; it follows you wherever you go (i.e., if you change jobs or relocate).
- Cost-effective: Disability income protection plans usually cost 1-3% of your income.
- Steady “paycheck”: If you cannot work due to an illness or injury, the benefits will provide a consistent flow of income to help pay for the essentials or some of life’s biggest moments.
Group disability insurance is cost-effective but has limitations, including tax implications, capped benefits, limited flexibility, and lack of portability. Traditional policies often provide benefits capped at $30,000 tax-free, which may be insufficient for high earners. For those needing higher coverage, supplemental options are available, which offer an additional layer of income protection beyond standard caps. Combining group, traditional, and supplemental coverage can provide a more comprehensive and tailored plan for your unique needs.
To ensure coverage and manage expenses in case of illness or disability, consider individual income protection plans for greater flexibility and security.
12022 Insurance Barometer Study, Life Happens and LIMRA