Disability and Your Finances

Eighty-two percent of American workers either have no long-term disability income protection or have inadequate coverage.¹ Yet people are more likely to have a disabling accident than to die in any given year.²

One potential solution is disability income insurance, which can provide a monthly benefit if you suffer a serious illness or injury and are unable to work.

Employer Plans May Fall Short
Although group policies can be very valuable, they can also be restrictive. The monthly benefit from a group policy is taxed as ordinary income. And group policies provide protection only while you are employed or a member of the sponsoring organization.

Individual policies may offer some advantages. Any benefits are normally free of income taxes if you pay the policy premiums. And an individual policy provides protection for as long as you keep it in force. Many policies even offer a waiver of premium.

You may want to consider purchasing an individual disability insurance policy to avoid having a disability trigger a financial crisis.

1) Consumer Federation of America and American Council of Life Insurers, 2001
2) 2004 Field Guide, National Underwriter

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