Be aware of the need for disability insurance - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Be aware of the need for disability insurance

Print
Font Size:
Default font size
Larger font size

Related Stories

Posted: Wednesday, May 15, 2013 10:28 am

It probably doesn’t show up on your calendar, but May is Disability Insurance Awareness Month. And you might agree that such a month is useful, when you consider the following:

• Three in 10 workers entering the workforce today will become disabled before retiring, according to the Social Security Administration.

• At age 42, you are four times more likely to become seriously disabled than to die during your working years, according to National Underwriter Life and Health.

• Disability causes nearly 50 percent of all mortgage foreclosures, according to Health Affairs, a health policy research journal.

Given these statistics, it’s not surprising that the Life and Health Insurance Foundation for Education (LIFE) sponsors Disability Insurance Awareness Month to encourage Americans to address their disability income needs. Here’s the bottom line: You can be really good at budgeting your money and you can be a disciplined long-term investor — but unless you’ve protected at least a reasonable percentage of your income, your whole financial strategy is incomplete. And all your goals, such as a comfortable retirement, could be jeopardized.

Of course, you may not be totally unfamiliar with disability income insurance; if you work for a large employer, a group disability policy may be part of your employee benefits package. If so, you should certainly accept the coverage, which may be offered to you free, or at minimal cost. However, this coverage might be inadequate to replace the income needed to allow your family to maintain its lifestyle without dipping into your investments.

Consequently, you might need to think about purchasing an individual disability insurance policy. Here are some tips:

• Look for a policy that is “non-cancellable” until you reach age 65. When you purchase a non-cancellable policy, your policy premiums can’t be changed, provided you pay them on time.

• Pick the right waiting period. Typically, disability insurance policies don’t start paying benefits immediately; there’s usually a waiting (or “elimination”) period ranging from 30 days to two years. Obviously, a shorter waiting period is more desirable, but it’s probably also going to be more expensive. You may be able to give yourself the flexibility of choosing the longer waiting period if you have created an emergency fund containing six to 12 months’ worth of living expenses, kept in a liquid account that offers significant preservation of principal.

• Avoid overly restrictive policies. You may want to avoid an “accident-only” policy or one with a limited benefit term (five and 10 years are common). These policies may be cheaper, but they don’t cover either a disabling illness or the entirety of your working life.

• Consider adding appropriate “riders.” It will likely add to the cost of your policy, but a cost-of-living rider will help protect your future benefits from the effects of inflation. You also might want to add a future income options (FIO) rider, which provides you with the ability to purchase additional coverage in the future with no further medical underwriting.

These suggestions are general in nature. Your financial advisor can help you determine if you need a private disability insurance policy — and, if so, what type of policy is best suited for your needs.

But don’t wait too long to take action in this area. You can’t predict the future, but you should still prepare for the unexpected.

• This article was written by Edward Jones for use by Ahwatukee Foothills Edward Jones Financial Advisor Joseph B. Ortiz, AAMS, CRPS. Reach him at (480) 753-7664 or joseph.ortiz@edwardjones.com. Accredited Asset Management Specialist and AAMS, Chartered Retirement Plans Specialist and CRPS are registered service marks of the College for Financial Planning.

More about

More about

More about

  • Discuss

NCPDP Announces Call for Proposals for its 2017 Annual Technology & Business Conference

Deadline to submit a proposal is September 2, 2016 SCOTTSDALE, AZ (PRWEB) June 27, 2016 NCPDP announced today the call for proposals for its 2…

Published: June 27, 2016 - 10:49 am @ http://www.bioportfolio.com/news/article/2758928/N…

Morning Break: Doc Suicide Film; Stop That or You'll Go Blind; Insulin Pump Anger

"Physicians have the highest rate of suicide among any profession": Pamela Wible, MD, is raising funds for a documentary on the phenomenon. Th…

Published: June 27, 2016 - 10:04 am @ http://www.medpagetoday.com/Psychiatry/Depression/58769

16 Moments That Led Democrats to Stop Playing Scared on Guns

When then-Senator and Democratic frontrunner Barack Obama was caught on tape musing about “bitter” Americans who “cling to guns or religion” i…

Published: June 27, 2016 - 10:06 am @ https://www.thetrace.org/2016/06/democrats-vs-nra-…

Watch out Donald Trump, Arizona Might Just be Going for Hillary Clinton

Miriam Wasser A A Given the amount of love and attention Donald Trump has heaped on Arizona in the past year, you'd think he'd have the state …

Published: June 27, 2016 - 10:05 am @ http://www.phoenixnewtimes.com/news/watch-out-dona…

Ousted teachers learn a lesson: Don’t badmouth your kids online

Topics: Blackstone Valley Prep, Education, rhode island, Slack, Social Media, Life News “We can all blow off steam, right?” observes the fathe…

Published: June 27, 2016 - 10:02 am @ http://www.salon.com/2016/06/27/ousted_teachers_ge…

“I can’t believe you’re supporting Donald Trump”: Jan Brewer stuns Martin O’Malley with refusal to acknowledge Trump’s campaign of bigotry

Topics: Bigotry, CNN, Donald Trump, Election 2016, Elections 2016, Jan Brewer, Martin O’Malley, Racism, Video, Video News, Elections News, Med…

Published: June 27, 2016 - 9:03 am @ http://www.salon.com/2016/06/27/i_cant_believe_you…

Racist incidents in the wake of Brexit won't be tolerated, warns David Cameron

Driving in Canada Canada - a home away from home Canada, it's time to change! Living with a disability in Indo-Canadian society The empire str…

Published: June 27, 2016 - 9:07 am @ http://timesofindia.indiatimes.com/world/europe/Ra…

Americans are paying more to live in the very places they once abandoned

America's urban downtowns were neglected for decades, abandoned for newer malls in the suburbs and bigger homes on the edge of town. The const…

Published: June 27, 2016 - 9:06 am @ https://www.washingtonpost.com/news/wonk/wp/2016/0…

How Following Your Bliss Can Lead to Better Business

Are you following your bliss? Are you working on what you’re most passionate about? Have you been willing to let go of all of your comforts an…

Published: June 27, 2016 - 9:02 am @ http://www.convinceandconvert.com/podcasts/episode…

Trying to get Maricopa County to respond to a privacy concern? Good luck with that!

As I’ve lamented (ok, bitched) many times: trying to notify an entity of a privacy or data security concern can be time-consuming and frustrat…

Published: June 27, 2016 - 8:48 am @ https://www.databreaches.net/trying-to-get-maricop…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…