By Jamie K. Fleischner, CLU, ChFC President, Set for Life Insurance by KF Financial, Inc.
There are many things we can’t live without. Most of us become very dependent on the things we love and wonder how we could have ever lived without it. Imagine having to wash your clothes by hand. Or remember the days of the pay phone? Personally, I can’t imagine how I ever survived without my beloved iPhone! Sometimes even our luxuries feel like necessities.
To take care of our important assets that we couldn’t live without, we leverage our risk with insurance. This includes homeowner’s insurance, auto insurance, and even life insurance.
But what drives all of these assets and luxuries? It’s your income. Ask someone who has recently lost their job how they are getting by. Even if you are currently gainfully employeed, you still are at risk of losing your income if you became too sick or injured to work.
Have you considered covering your most valuable asset-your income? Imagine surviving without your income. How would you survive? Do you have enough money in savings to cover you if you couldn’t work for 6 months? What about 2 years? Or longer?! Most people overlook protecting their income. However, most people could not survive without it.
Chances of becoming disabled are actually pretty steep. Between ages 30 and 65, a third of us will become disabled. Yet most people don’t take care of this need. It’s much more likely to happen than a flood or fire to your home and the ramifications are much greater.
Disability insurance is designed to pay you a monthly benefit if you become sick or injured and can’t work. A personal policy is non taxable (if paid with after tax dollars) and typically kicks in after a waiting period of 90 days or longer. You may choose a benefit period of 5 years, age 65 and lifetime. The longer the period, the more expensive the policy.
There are various types of definitions and policy provisions. These include definition of disability (try to purchase a policy that covers you if you couldn’t work in your specific occupation), partial disability, inflation riders, and the ability to purchase more in the future without further medical underwriting.
It is important to work with an expert that can help guide you through the process and find the most suitable policy for your needs. The underwriting process requires a look at your previous medical history and a paramedical exam (blood and urine test). Look for an independent broker that works with multiple companies instead of an agent that will only show you one company that may or may not be the best fit for you.
Premiums will vary based on gender, age, occupation, geographic location and policy definitions and riders. Rates are 30-40% higher for women than men based on risk. However, there are ways to create discounts if more than 3 people from the same employer apply. Plan on spending approximately 1-3% of your gross income to protect 60-75% of your take home pay.
For more information about protecting your most valuable asset, contact Set for Life Insurance at 888-553-3559 or visit s4l.wpengine.com. You’ll be glad your income is protected. It’s hard to survive without it.