Disability Insurance
Have you thought about what you would do if you were unable to work due to an injury? Disability insurance could be the answer.
For some reason, people are much more willing to buy life insurance than disability insurance. The statistics show that most people are much more likely to become disabled during their working years than die. Don’t get me wrong, life insurance is very important, but disability insurance is also.
If you’re disabled and unable to work, would you have a difficult time meeting your financial obligations? You probably have an emergency fund which will last for a little bit but what happens if you’re out of work for longer? Disability insurance can pay you money to help with your monthly financial obligations if you’re out of work.
For most people, Disability Insurance is a good value. The pricing is based on your occupation, so the more risky your job is, the more expensive the policy will be. But, keep in mind, the risker your job is, the more likely you’ll need to use the coverage provided by the policy.
Here’s how I like to explain disability insurance to someone who is unsure whether they should buy it. Suppose you were offered a new job which had a salary of $100,000 per year. Once you accepted the job, the hiring manager gave you two options:
- $100,000 salary with no wage continuation if you become disabled.
- $98,000 salary and, if you later suffer a disability which prevents you from doing your job, you’ll continue to receive two thirds of your salary until you’re able to return to work or until age 65.
Which option would you choose? Most people tell me they’d choose the second option. If you agree with that, then yes, buy a disability policy because that’s basically what it is. The numbers will be different based on your salary, age, occupation and a few other factors but that’s the gist of it.
If you’d like to have a conversation about your options, please visit www.calendly.com/lofrumento/proposal to schedule a conversation with me.
John Lofrumento, CFP®, FSCP®, RICP®
President, The Lofrumento Agency
Clifton Park, NY / Ballston Lake, NY