The Late-Career Disability Insurance Market
Workers nearing the end of their career are often looking forward to retirement, but they’re not ready to stop working quite yet. Unfortunately, a disability could force them out of the workplace prematurely – and that could put their dream retirement in jeopardy. Disability insurance provides critical protection at this important career phase.
The Late-Career Disability Insurance Market
Workers nearing the end of their career are often looking forward to retirement, but they’re not ready to stop working quite yet. Unfortunately, a disability could force them out of the workplace prematurely – and that could put their dream retirement in jeopardy. Disability insurance provides critical protection at this important career phase.
Disability Insurance for Older Workers
Workers in their 50s or early 60s have typically achieved their peak income. They earning more than they ever have, and they’re relying on that income to catch up on their retirement savings. It makes sense to protect their income – and their future retirement – with disability insurance.
Although older workers may have health problems that impact medical underwriting, it’s still possible to secure disability insurance – as long as they don’t wait too long.
Can You Buy Disability Insurance After Age 60?
After age 60, it becomes difficult to secure disability insurance because disability insurance companies may not be willing to offer a new policy. However, workers who have already purchased coverage can typically keep their coverage until they reach retirement age, which the insurer may define as 65 or 67.
This means that workers in their 50s need to act quickly to secure disability insurance. If they put off buying coverage, they may have few to no options available when they realize they need paycheck protection. On the other hand, if they lock in coverage now, they can be protected until they’re ready to retire.
The Advantages of Buying Disability Insurance for Older Workers
Buying disability insurance early is a good way to lock in more affordable rates and robust coverage, but if you’re older worker and you don’t have coverage yet, buying it ASAP can provide benefits:
- Secure portable coverage. This is important for people relying on group benefits. What happens if you’re laid off, and you have to take another job or switch to freelance work, and you lose your group disability benefits? If you already have individual disability insurance in place, you’ll still be protected.
- Safeguard your retirement. You’ve worked hard, and you’re looking forward to a retirement filled with travel and hobbies – not financial stress. Disability insurance can safeguard your retirement plans.
Disability Insurance for the Medically Impaired
By the time workers get their 50s, many of them will have developed health conditions that can impact medical underwriting, such as cancer, diabetes or heart disease. These conditions do NOT automatically disqualify workers from buying disability insurance.
For applicants with medical issues, simplified issue disability is often a great option. This type of policy uses streamlined underwriting with no medical example, blood work or medical documentation, allowing people with pre-existing conditions to secure coverage. Other options may also be available, depending on the exact situation and the carrier.
Retirement Protection Rider
Many older workers need to catch up on retirement savings. Their kids are grown, their mortgage may be paid off, and retirement is their main priority. As long as they can keep working, everything should work out fine – but if an injury or illness forces them to quit working before they’re ready, they could be facing a retirement disaster.
A disability insurance policy with a retirement protection rider provides a safety net. If you experience a qualifying disability, you’ll receive an additional benefit to cover retirement contributions. This way, you don’t have to worry about falling behind on your retirement savings and not being able to catch up.
Other Insurance Needs Insurance
Disability insurance provides a monthly benefit during periods of disability to help replace lost income. This can help you make ends meet during a period of disability, but there may still be some costs that make finances tight. For one thing, disability insurance policies typically have an elimination period, or waiting period, of around 90 days before you become eligible for benefits, and it can be another 30 days before you actually receive your first payment. For another thing, you may have extra medical bills that you have to pay out of pocket.
To help with these issues, you can add a layer of critical illness insurance on top of your disability insurance. If you experience a qualifying illness, you’ll receive a benefit, often as a lump sum, that you can use however you wish.
Individuals who are getting ready to retire may also be interested in long-term care insurance. The Administration for Community Living says 60% of people will need long-term care to help with dressing, meals and other daily tasks at some point. Because long-term care is not strictly medical in nature, it’s not typically covered under Medicare – and it’s very expensive. People in their 50s, 60s or 70s can secure long-term care insurance, and the earlier you buy it, the more affordable it will be.
Do You Need Disability Insurance?
If you’re trying to decide whether disability insurance is right for yourself or a client, ask the following questions:
- How much is your paycheck worth? Multiply your annual income by the number of years until you reach retirement age. You’ll likely see that your paycheck is your greatest asset – and it’s worth protecting.
- Could you afford to retire early? Many people are forced into an early retirement due to disability. Disability insurance can help your retirement savings stay on track.
- How would losing your paycheck impact your lifestyle? Would you have to cut back on the things you enjoy? If so, consider protecting your lifestyle with disability insurance.
Are You Ready to Serve the Late Career Disability Insurance Market?
If you’re a worker, an insurance agent can help you find coverage. Find an agent.
Are You an Insurance Agent?
If you’re an insurance agent, DIS can help you serve the late career market. Get a quote.
The following resources can help agents master the disability insurance for the late career market.
