Could you afford to be without a paycheck for three months – or longer?
“Our ability to earn an income is perhaps our greatest asset – greater than any home or auto we’ll ever own,” says Tim Bemis, assistant manager at Dupaco Insurance Services, which offers a complete line of insurance options, including disability. “We insure the home and car, but most of us overlook insuring ourselves and our income.”
Here are five truths about disability and its impact:
- The chance is real. The odds that you’ll become disabled are greater than most realize. Studies show that a 20-year-old worker has a one-in-four chance of becoming disabled before reaching full retirement age, according to the Social Security Administration.
- Disability can be lengthy. The average individual disability claim lasts 31.6 months, while one in eight workers will be disabled for five years or more during their working careers, according to the Council for Disability Awareness.
- Disability insurance can bring financial relief. Anyone who can’t afford to live without an income should carry disability insurance, Bemis says. Higher-risk occupations will face higher premiums, but the risk of a disability is greater. “There will be some folks with enough in their rainy day fund to get by for possibly several months, but anything longer becomes a severe financial hardship,” Bemis says. “Like any other product, disability insurance has to be affordable and fit into a family budget. But it should be given the priority in the budget that it deserves.”
- You can protect your outstanding loans. For the what-ifs in life, Dupaco members also can find financial relief through their credit union’s voluntary Payment Protection program. When participants unexpectedly suffer from a protected life event, such as a disability, Payment Protection might cancel or reduce repayment of their loan debt during that difficult time. Eligible members pay the same fee and only buy enough protection to cover their loan balance.
- You can lower your odds of becoming disabled. The majority of disability claims are caused by illnesses rather than accidents. Adopting healthier habits – including everything from maintaining a healthy body weight to getting regular checkups – can decrease your risk of disability. Learn more tips here.
By Emily Kittle