disability-insuranceMuch has been written about how ill-prepared boomers are for retirement, facing the challenges of insufficient retirement assets, rising health care expenses, and the need for long-term care. While retirees bear the brunt of this all-too-often combination of financial difficulties, their children and grandchildren, often millennials, will also pay the consequences.

Millennials face a triple-threat to their long-term financial security:

1. Probability that 25 percent will suffer a disabling injury or illness lasting three months or more.
2. Caregiving and financial support to aging parents and grandparents.
3. Higher student debt repayment obligations limit contributions to retirement savings.

Each of these challenges can be addressed by customizing a disability income insurance plan.

Challenge 1: High probability of illness or injury

Studies indicate that 25 percent of millennials just entering the workforce are likely to be unable to earn an income for at least three months or more at some point in their working lifetime. Retirement age for Millennials is predicted between 67 and well into the 70s, when illnesses and injuries are more common, considerably higher than today’s average retirement age of 61. Disability policies now offer coverage to age 67 for an additional premium. As retirement age increases, carriers will respond with new options for protection of older workers.

Challenge 2: Caregiving and financial support

As many as 20 percent of millennials are currently contributing, on average, $12,000 to parents. Long-term care studies reveal the emotional and financial impact to caregivers, often leading to reduced income at exactly the career point when income takes off and retirement contributions benefit from Catch-Up provisions. Millennials often cite concern for the financial security and long-term care expenses of aging parents. Some disability plans now offer a benefit to insureds who sacrifice income in order to care for elders. The benefit may be a part of the base plan or an optional benefit that requires a slight premium increase.

Challenge 3: Student debt obligations

According to Student Loan Genius, 42 million Americans are carrying student loan debt, averaging $37,173. For 73 percent, saving for retirement is postponed or contributions are reduced in order to pay down student debt. For an additional monthly premium, an optional Student Loan rider added to a disability insurance policy will make a payment directly to the provider when the insured is eligible for disability benefits on the base policy. It is easy to fall behind in student loan repayment when income is suspended or reduced due to an illness or injury. Reduced income during this period impacts current obligations and future retirement assets. The addition of optional student debt coverage is very affordable at $5 to $7 monthly.

For client financial concerns like these and others, customizing a disability plan is easy when you work with a DIS representative. With some information about budget and financial goals, we will help you design a disability plan that meets the unique needs of your client. Call us today for a quote.

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