32139856Most of us plan for retirement under the assumption that we will work a certain number of years before we quit working. But what would happen if an illness or accident forces you to quit working before you are ready? Not only will you retire before you’ve saved the amount of money you need; you’ll also be forced to start living off of your retirement savings too early. In most cases this can create a dire financial situation.

It’s easy to believe that it couldn’t happen to you. But according to statistics, a 50 year old person today faces a 36 percent chance that they will experience at least one long-term disability before age 65. Nine out of ten long-term disabilities are caused by illness or health conditions rather than accidents. Since a “long term disability” is defined as a debilitating condition which lasts 90 days or more, it’s easy to see how such an event could impact your ability to stay in your career.

If this happens to you, how do you currently plan to pay for medical expenses and monthly bills? Many people assume they will turn to Social Security in such an unfortunate event. However, it can be extremely difficult for many individuals to qualify for Social Security disability payments, due to restrictions and regulations in the program. Even if you do qualify, applications sometimes stall out for years before the first payment is ever received. In the meantime, you have to cover your expenses somehow.

It’s easy to see why purchasing a disability insurance policy is the smarter plan. A disability insurance policy will replace a certain percentage of your income in the event that you’re unable to work. As an added bonus, benefits will often be tax-free if you paid your premiums with after-tax dollars.

Many different sizes and types of disability insurance policy are available, so it’s important to decide exactly how much income you will need if you suddenly become disabled. Talk to your licensed insurance agent in order to find the insurance plan that is right for you.

*2012 Field Guide, National Underwriter
** CNNMoney, June 26, 2012

This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional.  The statements and opinions expressed are those of the author and are subject to change at any time.  All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only.  It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 

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