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Four Groups Need Paycheck Protection. Are You in One of Them?

Are you protecting your most valuable asset? Your most valuable asset isn’t tangible. It’s not your home, your car or your retirement savings — it is your paycheck. Going without paycheck protection insurance means putting your most valuable asset at risk.

How Much Is Your Paycheck Worth?

Just how valuable is your paycheck? To find out, multiply your annual earnings by the years until retirement. By doing this simple equation, you can quickly see that your income far exceeds the worth of all your other assets combined.

Let’s say you earn $60,000 a year now. You’re 35 years old, and you plan to work for another 30 years. Your expected earnings are $1.8 million! And that’s assuming you don’t get any raises over the next 30 years, which seems pretty unlikely. Your true earnings will likely be much higher than $1.8 million – unless a disability forces you out of the workforce.

Older workers also have a lot to lose. For example, let’s say you’re 50 years old, and you’ve determined that you need to work until you’re 65 to save up for retirement. You only have 15 years left to work, but you’re earning a nice salary at $100,000 a year. That’s an earning potential of $1.5 million. Once again, this simple calculation assumes that you don’t receive any additional raises, so your true earning potential is likely much higher.

Many people underestimate the value of their paycheck because they focus on one pay period at a time. When you look at your entire career, it’s clear that your paycheck is usually your most valuable asset.  

Disability Insurance Provides Paycheck Protection

The only way to protect your paycheck and your future is with disability insurance.

Disability insurance provides income protection for workers who depend on their paycheck. If a policyholder experiences a covered illness or injury, he or she can receive monthly disability benefits. This money can be used to replace lost wages and cover basic necessities like the mortgage or rent. It can also be used to help cover medical bills or fund precious time with loved ones. Policyholders get to decide how they use their monthly benefits.

Some employees receive short-term disability insurance or long-term disability insurance through their jobs, but many workers need to purchase individual disability insurance on their own. Even workers with job-based disability insurance often decide to buy supplemental disability insurance on their own because they want more robust coverage that they can keep when they switch jobs.

Do You Need Paycheck Protection Insurance?

Ultimately, anyone who depends on a paycheck can benefit from income protection. However, some groups have an especially great need for coverage.

Paycheck protection insurance is of paramount importance to the following four key groups.

  1. Older Workers – Many older workers are starting to think about retirement, but they’re not ready to retire yet. In fact, many older workers are trying to catch up on their retirement savings and cannot afford to stop working. Unfortunately, a disability could force them into an early retirement. The risk of disability tends to increase with age, so this is a serious risk that older workers need to be ready for. Disability insurance provides a safety net that many workers need.
  2. The Sandwich Generation – This generation is defined by supporting both children and elderly parents. Typically already pinched financially, incomes and savings can be depleted if a disability stops the breadwinner from earning a paycheck. The wise move is to protect yourself and your family with disability insurance.
  3. Single Parents and Divorcees – With limited incomes and large expenses, many newly single parents and divorcees don’t have a backup plan to protect their earnings. This group’s paychecks are important because there is no other earner for backup. For single earners, it is hard to create enough emergency savings in case of an injury or an illness. This is where paycheck protection comes in.
  4. Business Owners and Self-Employed Individuals – Business owners and the self-employed have many advantages. However, one thing this group doesn’t have is employer-sponsored group disability coverage. When many venture out on their own to create small businesses, they don’t replace that lost coverage, which is a big risk. Because incomes and earning patterns for the self-employed are already unpredictable, their paychecks need protection, especially if an injury or illness occurs. As the number of independent contractors rises, the need for disability insurance is also increasing. In addition to individual disability insurance, self-employed workers may need business overhead expense insurance and other disability products designed for small businesses.

Disability Insurance Isn’t Just for Doctors and Office Workers

The above categories include workers in a wide variety of industries. However, it’s often only doctors and office workers who think about the need for disability insurance. This oversight leaves many workers unprotected.

  • “Blue-collar workers” like plumbers and truckers need paycheck protection. These workers often have physically demanding jobs, so a disability could put their ability to earn an income at risk. Moreover, many of these workers are business owners, so they have additional disability insurance needs.
  • “Pink-collar workers” like nurses and teachers – industries traditionally associated with female labor – need paycheck protection. Many of these workers are breadwinners for their families, and they may also be supporting aging parents. They have a lot of people depending on their paychecks!
  • “Gray-collar workers” like chefs and air traffic controllers – workers whose jobs require a mix of formal training and physical labor – need paycheck protection. These workers often have good salaries worthy of protecting.

Learn more about blue-, pink- and gray-collar workers and their disability insurance needs.

Do you fall into one of the above categories? If you do, get disability paycheck protection now. Take action to protect your income and your future.