Your Risk of Becoming Disabled


  • 25% of 20 year olds will become disabled prior to retirement. [1]
  • Most disabilities are caused by arthritis, not work-related accidents. [2]
  • Women are twice as likely to be disabled by arthritis as men.[3]

 

These are some of the findings published in the August 2012 issue of the FPA’s Journal of Financial Planning. 

No matter what your profession, there is the possibility that illness or accident may prevent you from earning a living. Although none of us likes to think about it, there is a strong likelihood that many of us will be temporarily or chronically disabled at some point in our working career.

If forced to stop working well short of your projected retirement date, what would that do to your financial plan?  Could you stay in the same house?  Still send your kids to college?

If you haven’t seriously thought about disability insurance up to this point, spend time thinking through these issues and deciding what is best for your family. 

If you do not know the answer to the following questions, consider working with a professional:

  1. How much disability insurance do you need? 
  2. What type of policy do you have or need to obtain?  There are policies that cover your inability to do a specific job or your inability to do any job.  For example, some policies won’t pay a surgeon when he loses the ability to perform surgery if he can still work at other types of jobs.
  3. If you have a policy, are the benefits taxable or tax free?
  4. If you have a policy, do you know the elimination period?   This is the period of time between when you have filed for disability and when the benefits begin.
  5. Do you need an individual policy or is a group policy sufficient?
 
Note:  I do not sell disability insurance or any other products.  
 

[1] Mathew Greenwald and Mary Quist-Newins. August, 2012. Women and Disability Risks.  Journal of Financial Planning.

[2] Mathew Greenwald and Mary Quist-Newins. August, 2012. Women and Disability Risks.  Journal of Financial Planning.

[3] Jans, L., and S. Stoddard. 1999. Chartbook on Women and Disability in the United States. An InfoUse Report. Washington, D.C.: U.S. National Institute on Disability and Rehabilitation Research.

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