|
|
January 15, 2010  Are you as prepared for the unexpected as you should be?  I just broke my clavicle in a skiing accident along with 5 ribs. I had surgery to repair the clavicle, but believe me, it is hard to go about your every day activities with broken ribs. It got me thinking....what would I do if I had a job where an injury like this, or god forbid worse, prevented me from doing my job?  It is becoming increasingly clearer that we will not be able to count on government programs like Medicare, Medicaid and Social Security to help secure our future given the number of Americans hitting eligibly in the next two decades and the serious deficits these programs are already running.  It's incumbent upon us to make our own preparations to secure our future by planning properly for the unexpected and doing the proper financial planning to insure that our families will be taken care of properly.  It's hard to argue with the numbers! | |
|  What Sources of Funds May Be Available to Replace Your Earning Power During a Disability? | Source | Evaluation | |  |  | | Savings | If you save 10% of your income each year, it will take 10 years to set aside just one year's income. | |  |  | | Borrow | What creditor is going to lend money to a disabled income earner? | |  |  | | Liquidate Assets | Assuming a market exists, a forced liquidation of assets can reduce their value. A single disability could consume the assets you've worked a lifetime to accumulate. | |  |  | | Spouse's Earnings | Your lifestyle may already be built upon a dual income. If, however, your spouse is not currently an income earner, is it realistic to assume that he or she could replace your earning power? | |  |  | | Social Security Benefits | It can be difficult to qualify for Social Security disability benefits. Assuming, however, that you do qualify, Social Security benefits do not begin until the sixth full month of disability and are generally not adequate to replace your earning power. | | There is, however, a potential solution... Personally-owned disability income insurance, coordinated with other sources of disability income.  | |
| Death versus Disability Is This a Gamble You Want to Take?  | Risk of Disability for 3 Months or Longer versus Risk of Death |  | Average Duration of a Disability Lasting Over 3 Months Prior to Age 65 |  | |  |  |  |  |  |  |  |  |  |  |  |  |  | | 1.71 to 1 |  | | 1.63 to 1        Disability |  | |  | |  | |  | | 1.27 to 1 |  | | 3.4 years |  | Death |  |  | 2.9 years | 2.9 years |  | | 2.2 years |  | |  | |  | |  | |  | |  | |  | |  | |  | | |  |  |  |  |  |  |  | Age 35 | Age 45 | Age 55 |  | Age 25 | Age 35 | Age 45 | Age 55 |  | | |  |  |  |  |  |  |  |  |  |  |  |  |  | Source:  1986 Commissioners Disability Table    In fact, disability is 16 times more likely than death to cause foreclosure! | Cause of Foreclosure |  FHA |  VA |  Conventional |  Average | Death | 4% | 3% | 2% | 3% | | Disability | 48% | 49% | 46% | 48% |  Source:   U.S. Housing and Home Finance Agency  What steps have you taken to protect your earning power in the event of a disability? |  |
I can help you prepare for the unexpected. At Farm Family, we have both Disability Income and Life Insurance products to address these risks. Please give me a call to discuss your unique situation and let's make sure, together, that you are prepared for the unexpected and preserving your lifestyle for your family, regardless of what happens to you or your income. | |
