May is Disability Insurance Awareness Month (DIAM). Every year, in the month of May, The Council for Disability Awareness joins forces with others in the insurance industry to raise awareness about the importance of income protection. Discover why protecting your income is critical to your financial success by asking yourself these questions.
Do I Need Disability Insurance?
When it comes to becoming too sick or hurt to work, many people think, “It won’t happen to me.” But are you willing to risk your dreams and your family’s financial security by betting the odds?
Do I Need Income Protection?
One in four of today’s 20-year-olds will become disabled before they retire. The average long-term disability absence lasts over two and a half years. How would you pay your bills if you didn’t have a paycheck for two years or longer?
How Much is At Stake?
A 30-year-old earning $50,000 a year could earn more than $1.5 million by the age of 65. Disability insurance is not only for big paycheck earners. Your income pays for the big things: home, car, retirement. It also pays for the little things: Gym membership, smartphone, children’s dance lessons. If you become too sick or hurt, you could lose them all
Am I Protecting What’s Most Important?
People protect their homes, cars, lives and even identities with insurance. But often don’t think to protect their incomes. People are 240 times more likely to become disabled than to suffer a fatal injury.
Aren’t I Already Protecting My Income?
You may think you’re covered, but the protection you have likely won’t be enough. Group long-term disability coverage typically only covers 60% of your gross income, and the benefits are usually taxable (and capped at a certain amount). This means your take-home pay is further reduced.
- Workers Compensation: Less than 5% of disabling accidents and illnesses are work related; the other 95% would not be covered.
- Social Security: Of the 2.8 million workers who applied for Social Security disability benefits in 2011, 65% were denied.
Can I Afford Income Protection?
The premium for individual disability income insurance is typically just 1% – 3% of what you earn. If you are earning an income and can’t afford to retire tomorrow, you need disability income insurance.