Disability Insurance Protecting Your Most Valuable
Asset
By: Diana L. Yuhas, LUTCF
Field Representative, LUTTNER FINANCIAL GROUP
Your ability to earn an income is more than just a paycheck, it is your most valuable asset. It enables you to purchase and enjoy those things which define your lifestyle – your home, vacations, children’s education, and more. And yet, this valuable asset often goes unprotected.
Consider how you would maintain your lifestyle if you became sick or injured and unable to work, Use your savings? Borrow from family or friends? Hope you qualify for Social Security? What if you were disabled for 90 days or longer?
Average Duration of Disability Lasting More Than 90 Days to Age 65
Age Duration Age Duration
Under 40 4 years 50-54 4 years, 6 months
40-44 4 years, 4 months 55-59 3 years, 6 months
45-49 4 years, 7 months 60-64 1 year, 9 months
Most likely the sources mentioned above will not provide enough, or be available, in the event of a long – term disability.
The Standard Insurance Company offers an individual Disability Income Policy, endorsed by PSPA, designed to protect your lifestyle and tailored to meet your needs.
If you suddenly lost your income due to sickness or accident,
would you be able to pay your bills?
You may think the odds are one in a million that it could ever happen to you.
The truth is, you are more likely to be disabled than to die during your working
years. This probably is not what you want to hear while you are healthy and
earning a good income. But what happens if you become disabled and lose that
income? Your income goes down while your expenses (including unanticipated
medical bills) typically go up.
How would you pay your bills?
• You could use your savings. . .What will you be giving up? A child’s
education? Retirement?
• You could borrow money. . .Who will lend you what you need? How will
you pay it back?
• You could tap into Social Security. . .Their defintion of disability
is strict and you may have to wait for as long as a year to qualify.
• You could ask friends or relatives to help. . .They most likely have
their own problems.
There is another solution:
• A Disability Income Insurance policy from The Standard Insurance Company.
The following example shows how The Standard can help to solve your problems:
EXAMPLE
Female age 30 – preferred rates – non smoker
Group Disability Coverage with additional Individual Disability Coverage
1. Annual Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000
annual or $5,000 month
2. Percentage of group Disability Insurance in force. . 60%
3. Amount of annual income group coverage. . . . . . . $36,000 or $3,000 month
4. Amount of annual disability income subject to
Regular taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . $36,000
or $3,000 month
5. Shortage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,000
annual or $2,000 month
6. Amount of eligible annual income paid by an individual
Disability income policy TAX FREE. . . . . . . . . . . . $12,000 annual or $1,000
month
7. Total monthly income while on disability. . . . . . . . . $4,000 –
($3,000 taxable)
SUMMARY
If you are earning $5,000 per month (pre tax) and are only receiving $3,000
(pre tax) while on disability, there is a shortage of $2,000 (pre tax) or a
shortage of $1,440 (post tax) income. An additional individual Disability Income
Policy through The Standard – at PSPA Association discounted rates –
will help to cover the shortage.
The Standard’s Disability Income Insurance is designed for one purpose:
to preserve your future.
Please call for a quote or direct any questions to Diana L. Yuhas, LUTCF at
Luttner Financial Group at 1-800-565-2010 or 724-832-0535.
Published in the Fall 2004 PSPA News