Most people would never imagine owning a house or vehicle without insuring it. People’s homes and cars are valuable assets and they naturally want to protect themselves. These same people often do not have adequate coverage (or any at all) for their largest most valued asset — their income!
Successful people consider more and more to secure their income in a case of a disability. Why do they do it? Because without proper planning, an unexpected disability can quickly exhaust their savings and create a substantial debt. Their income is essential to them and gives them their freedom. A 39 year old man for example: with an annual income of $60,000 and an assumed annual increase of 3% of his salary could lose up to $2,313,000 income if he gets totally disabled. It is evident that the need for income replacement is universal–yet many people don’t have this valuable coverage. The following statistics illustrate the need for income protection in the United States:
In 2003 alone, there were 3,400,000 disabling injuries, this breaks down to:
• 65,385 a week,
• 9,341 a day,
• 389 an hour and
• 1 every 10 seconds!
• During the course of your career, it is 3.5 times more likely to be injured and being in need of disability coverage than to die and need life insurance. This means that chances of getting injured during your career are 56%.
• Are you playing the Lottery? Well, then your chances to win are smaller than 0.0000008% => Your chances of winning the Lottery compared to getting insured are 7,000,000 smaller
There are different kinds of Disability income sources for short-term and long-term coverage, like:
• Worker’s compensation (WC)
• Social Security and
• Disability insurance
Workers compensation benefits are available to individuals who suffer an accident at work or an illness that results from their employment. The key words here are “at work” and “as a result from their employment”. If the injury happens outside of the job, there is NO coverage over workers compensation.
The coverage that Social Security can provide is not enough. Although it may help if you qualify, but the government is limited in the ability to meet your financial needs. Qualifying for Social Security disability benefits is difficult. Rules for determining disability are very strict. Even if you qualify there is a waiting period of five full calendar months where no benefits are being paid–and, in many cases, it may actually take up to 12 months before you can collect any benefits.
Only Disability insurance covers you in all cases if you are unable to perform the martial and substantial duties of your current occupation and receive medical treatment due to injury or sickness.
Imagine you wouldn’t be able to work and earn your current income anymore. What would be the consequences? What impact on your current situation would it have? For how long would you be able to pay your bills, mortgage, car payments, etc? These are important questions that you should ask yourself to take action for the next steps.
Thomas Hermschulte is a Financial Adviser and Representative of Mutual of Omaha http://www.MutualofOmaha.com
We are celebrating this year our 100th anniversary, which wouldn’t be possible without our clients! Our mission this year at Mutual of Omaha is to get in touch, not only with our policy holders, but with everybody who wants our help and experience to give them a FREE professional consultation of their policies.
If you want to learn more what we can offer for you, contact me:
2601 Main Street, Suite 960
Irvine, CA 92614
Cell: 714.330.1899
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