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

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 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

Notre Dame Preparatory High School coach fired amid rule violation allegations

SCOTTSDALE, AZ - Notre Dame Preparatory High School's head football coach has been fired after the team was placed on probation for alleged ru…

Published: October 27, 2016 - 6:24 pm @…

'Entrepreneuer' mag names 10 Arizona businesses to list of best entrepreneurial companies

Arizona had a healthy showing on a new list highlighting the best entrepreneurial companies in the U.S. A total of 10 Arizona-based businesses…

Published: October 27, 2016 - 6:16 pm @…

Authorities report finding 30 more skimmers at Arizona gas stations

PHOENIX - Authorities say an additional 30 devices used to steal credit and debit card information have been found across the state in the pas…

Published: October 27, 2016 - 5:32 pm @…

CHECK IT OUT: Arizona Center to get $25 million upgrade in 2017

PHOENIX - Downtown Phoenix's Arizona Center shopping area will receive a large-scale upgrade next year. The million-square-foot retail-and-sho…

Published: October 27, 2016 - 5:03 pm @…

Will State DOTs Follow Through on Their Goals for Zero Traffic Deaths?

State DOTs aren’t known for setting ambitious street safety goals. They’re usually more interested in moving traffic than saving lives. But it…

Published: October 27, 2016 - 5:02 pm @…

A Hospital Exec Is Desperate to Keep Kids from Getting Shot. So He's Hosting Field Trips at the Morgue.

In the basement of a hospital in east Brooklyn, 16 middle school students dressed in navy blazers and striped ties stare through a pane of gla…

Published: October 27, 2016 - 4:52 pm @…

FOX 10 Phoenix - Timeline

See more of FOX 10 Phoenix by logging into FacebookMessage this Page, learn about upcoming events and more. If you don't have a Facebook accou…

Published: October 27, 2016 - 4:45 pm @…

Measure in Florida That Claims to Back Solar Power May Discourage It

Florida’s biggest electric utility companies are backing a proposed constitutional amendment that, the campaign says, “promotes solar in the S…

Published: October 27, 2016 - 4:36 pm @…

The importance of bike safety

For Trisalyn Nelson, inspiration hit when the oncoming car almost did. One day in 2014, Nelson was cycling on her way back from work at the Sp…

Published: October 27, 2016 - 4:32 pm @…

8 Things to Do in Metro Phoenix for $10 or Less, October 28 to 30

Becky Bartkowski A A In between celebrating Día de los Muertos, hitting up the scariest of haunted houses, and scrambling to put together a Ha…

Published: October 27, 2016 - 3:35 pm @…

Facebook on Facebook

Twitter on Twitter


Subscribe to via RSS

RSS Feeds


Most Popular

Online poll