Disasters are often hard to predict, even when we do see them coming. Hurricanes, floods, earthquakes and fires tend to strike suddenly and behave erratically – and as everyone knows, by the time a disaster strikes, it’s a little late to start preparing.
That said, if you’ve taken steps in advance to mitigate the unexpected, you can side-step the brunt of a disaster’s force. We’re not talking about stashing bottled water in your basement. We’re talking about disability insurance.
Disaster Preparedness and Disability Insurance
Perhaps it’s strange to hear that disability insurance could have anything to do with disaster preparedness. Nevertheless, part of disaster planning is financial planning, and the basic purpose of disability insurance is to make sure your paychecks continue to roll in when you need them most.
Beyond natural disasters (which are top of mind this week with recent earthquakes in California and Chile and the deadly mudslide in Washington), there are tons of personal disasters – motor vehicle accidents, cancer diagnoses, strokes and heart attacks to name a few. None of these are covered by workers’ compensation and employer-sponsored long-term disability is unusually terribly inadequate.
With these facts in mind, here’s a quick list to share with your clients:
It’s Time to Protect Your Paycheck, if…
- Your personal savings don’t provide a long-term buffer for extended unemployment.
- You’re not willing to put your family’s lifestyle at risk.
- You don’t want to stress about money while recovering from an injury or illness.
- Your greatest asset is your ability to work.
- You’re not independently wealthy.
- You hate the idea of being financially reliant on friends or family members.
- You don’t want to dip into retirement savings or interrupt your ability to save for retirement.
- You plan to send your kids to college.
- You like the idea of keeping your house.
- You want to be sure that you won’t lose everything in the event of a disaster.
Although disability insurance is generally overlooked, especially by young people, consumer advocates agree it’s an absolutely essential safeguard. Yet the Hartford Financial Services Group reports that only 39 percent of workers in their 20s and early 30s have long-term disability insurance – although three out of ten 20-year-old workers will experience disability before age 65, according to the Social Security Administration.
Given how many natural disasters (and personal disasters) have hit the headlines over the last several years, disability insurance is more of a necessity than ever before. Protect your paycheck during a crisis: consider it part of your disaster preparedness package, right along with that bottled water.