Your Earning Power with Disability Insurance
people agree that it makes sense to insure valuable possessions
like their home and car. Yet many of these same people neglect
insuring their most valuable asset ó their ability to earn an
youíre healthy and able to work, itís easy to assume your life
wonít be interrupted by disability. However, according to a 1984
study published by the U.S. Department of Health and Human
Services, one in three people between the ages of 35 and 65 will
suffer a long-term disability (more than 90 days) during his or
her working life.
even if you suffer a long-term disability, your inability to work
may not mean a fight for your economic life. Disability income
protection is a way to keep you financially secure in case the
needs disability insurance?
put, anyone who relies on a paycheck to meet monthly expenses
needs disability insurance. If youíre among the fortunate and
have saved enough to live comfortably in retirement, you can
probably opt out of this coverage. But for growing families with
heavy debt loads and little savings to fall back on, protection
against loss of income is especially important.
workers think government disability insurance programs adequately
cover them if they become disabled. While Social Security is one
source of disability coverage, the rules are strict, and according
to the Social Security Administration more than one-half of
first-time applicants are denied benefits. Others may assume that
workersí compensation is all they need. Unfortunately you are
only eligible for benefits if your disability is a result of a
work-related illness or injury.
of the most economical ways to obtain disability coverage is
through group plans offered by some employers. Among working
Americans with disability protection, many are covered through an
employerís plan. Group coverage typically pays 60 Ė70 percent
of your current base income (does not cover bonuses, commissions,
etc.) and waiting periods will vary from plan to plan.
you arenít eligible for an employer-sponsored disability plan or
wish to supplement your employer-provided coverage, you can
purchase an individual disability policy. Although they typically
cost more, most individual policies also offer more generous
benefits than group policies. Benefits may include shorter waiting
periods and the ability to maintain uninterrupted coverage if you
shopping for disability insurance, consider these points to
maximize your dollars:
policies generally have two different benefit period options ó
one that covers disabilities of five years or less and one that
provides lifetime benefits. The longer time period you select the
higher the cost of the premium.
You can reduce your policy cost by increasing the length of the
waiting period which is the time you must wait before you begin
residual benefit is a good way to protect yourself against partial
disabilities. This inexpensive form of coverage provides you with
the difference between your pre-disability income and
post-disability income after you have experienced a disability.
While this is one of the most expensive forms of coverage, it
protects you if you are unable to work in your present occupation.
Otherwise, your insurer wonít pay you unless you canít work at
means the company must insure you as long as you make the premium
payments. Your policy canít be canceled for any reason and your
premiums canít be increased.
planning is an important component for anyone who is managing his
or her personal economy. As with any issue that affects your
long-term financial security, itís best to consult a qualified
financial advisor before making your disability insurance coverage
American Express Financial
Advisors Inc. Member NASD. American Express Company
is separate from American Express Financial Advisors Inc. and is
not a broker-dealer.
This communication is published in the United States for residents of
North and South Carolina only; and this advisor is licensed only in
the states of North and South Carolina."
Roy P. Janse
Financial Advisors, Inc.
IDS Life Insurance Company
1150 Haywood Road
Greenville, SC 29615
Phone: (800) 554-0805 x141
Fax: (864) 234-7139