The Purpose of Disability Income Insurance

Disability income insurance (DI), sometimes referred to as income protection, is exactly that – protecting your ability to earn a living. If you become sick or hurt and unable to work, you’ll receive payments based on your particular policy. This check will help you continue paying living expenses such as rent, mortgage, car payment, food, insurance, utilities, medical expenses and more.

If you depend on your ability to work and earn an income, you need disability insurance. If you cannot respond to, “Who will take care of your monthly expenses if you become sick or disabled and not able to work?” you need DI.

How Much Disability Insurance do I need?

Add up all the benefits you are entitled to under your employer program and other individual disability insurance you may have, along with the monthly income you could count on from other sources such as your savings. If the total is less than your required income after taxes, you may be unable to pay your day-to-day bills while recuperating and you will want to consider purchasing additional disability insurance.

Disability Insurance Stats

Disability Can Strike Anyone

  • At age 25, you have approximately a 44% chance of suffering a long term (90 days or longer) disability prior to age 65. The average duration of a disability that has lasted at least 90 days is 4.3 years.
  • At age 35, you have approximately a 42% chance of suffering a long term (90 days or longer) disability prior to age 65. The average duration of a disability that has lasted at least 90 days is 4.7 years.
  • At age 45, you have approximately a 39% chance of suffering a long term (90 days or longer) disability prior to age 65. The average duration of a disability that has lasted at least 90 days is 5.5 years.
  • At age 55, you have approximately a 33% chance of suffering a long term (90 days or longer) disability prior to age 65. The average duration of a disability that has lasted at least 90 days is 6.2 years.
  • *SOURCE: Disability Probability – 1985 Exposure Draft Report to The Society of Actuaries. Disability Duration – Journal of the American Society of CLU & ChFC, Vol. VII, No.1

 

Securities offered through First Allied Securities, Inc. Member FINRA/SIPC. Advisory services offered through First Allied Advisory Services Inc., a registered investment adviser.

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