Disability Income (DI) insurance is an insurance policy that provides you with a monthly income if you become sick or hurt and cannot work. Individual DI policies pay out a monthly tax-free benefit; they are also a good complement to an employer DI policy which pays out a taxable benefit.
You may be asking yourself, "Do I really need a disability policy? I mean come on I'm young, healthy, I exercise, I even look both ways before crossing the street!" Well, don't take my word for it just look at the statistics.
One in three Americans between the ages 35 and 65 will become disabled for more than 90 days.
Historically, disability causes nearly 50% of all mortgage foreclosures, compared to 2% caused by death.
Health Affairs, The Policy of The Health Sphere, Feb. 2, 2005
Almost 95% of disabling accidents and illnesses occur off the job and do not qualify for worker’s compensation.
Council for Disability Awareness, Long-term Disability Claims Review, 2011
Just over one in four of today’s 20-year-olds will become disabled before they retire.
Social Security Administration Fact Sheet - March 18, 2001
Almost one-third of Americans entering the workforce today (3 in 10) will become disabled before they retire.
Here are a few Myths and Truths regarding the need for disability insurance.
Myth: I have enough disability income insurance coverage through my employer.
Truth: Group disability coverage only covers 60% of your gross income, and benefits are taxable. Can you afford a more than 40% pay cut?
Myth: I can always buy coverage later.
Truth: People usually don’t get healthier as they grow older, and coverage will cost more.
Myth: I can rely on my savings.
Truth: Even if you consistently save 10% of your salary, just one year of disability could easily wipe out many years of savings.
Myth: My family and friends will help me.
Truth: Are your loved ones in a financial position to support you? Do you want them to?
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*This blog is strictly the opinion of Michael A. Malleo and not those of
ASH Brokerage Corp., nor any of our affiliates.
Malleo Financial Services LLC cannot and will not give any specific tax or legal advice.
Please consult your tax professional or legal professional for such advice.