As we enter the month of May, it's time to turn our attention to a topic that often flies under the radar: Disability Insurance. May is Disability Insurance Awareness Month. While many of us diligently insure our homes, cars, and health, there's one asset that often gets overlooked—our ability to earn an income. Disability insurance, also known as income protection insurance, is the safety net that ensures financial stability when life throws unexpected challenges our way.
The Importance of Income Protection:
Consider for a moment all the assets you've insured throughout your life—your home, your car, your health. What do they all have in common? They rely on one crucial factor: your income. Your ability to earn a living is the foundation upon which your financial security and lifestyle are built. But what happens if that foundation is suddenly compromised due to a disability?
Disability can come in many forms. It can be accident or illness related. When it comes to disability insurance, the trigger is the inability to perform or substantially perform the material requirements of your job. Many people think of severe injuries, such as confining one to a wheel chair, as a disability. However, this is not always the case. We all know folks diagnosed with cancer or other diseases requiring substantial time away from work. Depending on your job, an injury to your hand or eye could limit your ability to work at a computer. A back injury can not only affect laborers, but for office workers as well- especially if it limits your ability to sit up straight for extended periods of time.
The consequences of losing your income due to a disability extend far beyond your own financial well-being—they ripple through every aspect of your life, impacting your family, your future plans, and your sense of security. Suddenly, everyday expenses become burdensome, savings dwindle, and dreams are put on hold. The emotional toll can be just as significant as the financial strain, as individuals grapple with feelings of uncertainty and vulnerability.
Common Riders for Enhanced Protection:
When it comes to disability insurance, it's not just about having coverage—it's about having the right coverage. Here are some common riders that can be included on a disability policy to enhance its protection:
Own-Occupation Rider: This rider ensures that you receive benefits if you're unable to perform the duties of your own occupation, even if you can work in another capacity. For professionals with specialized skills, such as doctors or lawyers, this rider provides essential protection by recognizing the unique nature of their work.
Cost of Living Adjustment (COLA) Rider: Inflation can erode the purchasing power of your disability benefits over time. The COLA rider adjusts your benefit payments annually to keep pace with inflation, preserving the value of your coverage throughout the duration of your disability.
Partial Disability Rider: This rider provides benefits if you're able to work in a reduced capacity due to a disability, resulting in a partial loss of income. It offers financial assistance proportional to your loss of earnings, ensuring that you have support during periods of transition or recovery.
Future Increase Option (FIO) Rider: As your income grows over time, so too should your disability coverage. The FIO rider allows you to increase your coverage without undergoing additional medical underwriting, ensuring that your insurance keeps pace with your evolving financial circumstances.
The Pitfalls of Relying Solely on Employer-Provided Coverage:
While many individuals may have disability insurance through their employers, it's essential to recognize that this coverage often falls short. Employer-provided disability insurance may be inadequate in terms of coverage limits and may not be portable if you leave your job. Moreover, relying solely on employer-provided coverage leaves you vulnerable to gaps in protection during periods of transition or unemployment.
Affordability and Accessibility:
One common misconception about disability insurance is that it's prohibitively expensive. However, the reality is that disability insurance can be more affordable than you think, especially when compared to the potential financial consequences of being without coverage. By exploring different policy options and working with a knowledgeable independent insurance agent, you can find a disability insurance solution that fits your budget and provides comprehensive protection for you and your loved ones. Even insuring only a portion of your income is better than no coverage at all.
Conclusion:
As we observe Disability Insurance Awareness Month this May, let's take the opportunity to prioritize our financial well-being and protect our most valuable asset—our ability to earn an income. By understanding the importance of disability insurance and the role it plays in safeguarding our financial security, we can take proactive steps towards building a brighter and more resilient future for ourselves and our families.
If you do not have disability insurance or would like a review of your current coverage,
please give us a call!
(available in KS, MO, CO and AR)
(913) 904-1020
or check disability pricing here!
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