Most don’t realize how Disability Insurance can really help families when someone is hurt/ill and can’t earn an income. Many don’t purchase a policy because they think that Social Security will pay for their expenses if they are ill or get hurt. But, that’s not necessarily true.
Take a look at this example of how Disability Insurance policy could have helped the Smith family during their time of need.
Pat and Don, a Typical Family
“For a sense of how a disability can impact a family’s finances, consider Don and Pat Smith.
- Don and Pat live in a Midwestern city and are the parents of a 9-year-old boy. Don, 35, earns $45,000 a year selling cars. His monthly take-home pay is $2,129.
- After staying home several years to care for their son, Pat is now a part-time receptionist in a local dental office. She brings home $800 a month.
A Healthy Issue Strikes Don
- Don and Pat are able to support their lifestyle until Don becomes ill due to Parkinson’s disease and can no longer work. Suddenly, there is a dramatic reduction in the Smith’s income.
- Don is not eligible for Social Security disability. (To be eligible, Don would have to demonstrate that he is unable to engage in any gainful work that exists in the national economy, regardless of whether such a job exists in the area in which he and Pat live.)
- Don has no prior military or civil service that might qualify him for other government disability programs. He does not qualify for Workers’ Compensation benefits because his illness is not job-related.
Depending on one key factor, whether he has Disability Insurance, is where his life goes from here.
If Don Had Disability Insurance
If Don’s employer provides Long-Term Care Disability Insurance and Don signed up for it, he would be entitled to benefits under his employer’s policy—probably up to 60 percent of his gross salary, or $2,250 a month.
With this money, this family would be able to continue paying their rent, groceries, car payments, and childcare, etc. This money would greatly help them continue paying life’s daily bills and would prevent them from having to use their life savings.
If Don Does Not Have Disability Insurance
If Don’s employer didn’t provide any Disability Insurance benefits, the Smith’s would have no choice, but to almost immediately begin spending down whatever savings they might have accumulated up to that point in their lives and hope that Don could return to work soon.
This family even have to borrow money from family member’s. Many families in this situation, unfortunately, head toward foreclosure and bankruptcy.
What Should Have Don Done To Protect His Family
If Don didn’t have any coverage options through work, he could have purchased an individual policy on his own through an experienced Disability Insurance advisor.
By planning ahead and setting a policy in place, he could have been prepared for life’s surprises and health issues ahead of time. Having Disability Insurance before you even need it secures you and your family’s future finances if there is ever a time you can not work and earn an income.
Make A Move
To protect your financial future, get in contact with one of our advisors by calling (800) 788-8921 or filling out our brief Contact Form so that we may contact you to discuss your Disability Insurance options and answer all of your questions.