If you lose your job, you may lose your insurance benefits too.  So what should you do? First, consider switching to a term life insurance policy. If you have a group life policy, you will most likely lose your coverage if you lose your job. A term life insurance policy is usually less expensive and portable.

In addition, you may want to consider comparing individual health insurance policies.  Why? If your company goes bankrupt and there is no longer a health plan. COBRA may not be available.  In addition, individual health insurance policies are usually less expensive than COBRA depending on your health.

You protect your health and life, but don’t forget to protect your biggest asset…your ability to work.  Shop around for individual disability coverage. Unlike the one from an employer, consumers can keep this coverage if they move from job to job. And, benefits will be tax-free if the premiums are paid by the insured.

Be sure to a policy is paid for before dropping ANY existing coverage.  If you are one of the unfortunate people that will lose your job, you’ll be happy that you took a moment to consider your insurance needs before hand

What’s the one most important thing you should insure?  I’ll give you a hint – it’s not term life insurance and it’s something we all take for granted.  What is it?  The ability to work.  That’s why disability insurance is VERY important.

May 1^st marks the beginning of Disability Insurance Awareness Month (DIAM), which is organized by the Life Insurance Foundation for Education.

Just think about it.  Your income is by far your most valuable asset!  What would you do if you weren’t able to earn money for ninety days, a year, or even longer?  How would you pay for your mortgage, food, cars and other bills?  How long could you and your family survive?

Did you know that the odds of becoming disabled are 3 times higher than the odds of dying before age 65? In fact, statistics show that 1 in 4 families identified an illness or injury in their family as the major reason for bankruptcy.  And amazingly, 48 percent of all home mortgage foreclosures are due to a disability.

If you don’t have disability insurance, you’re not alone.  Eighty-two percent of Americans have little or no coverage.  The message is clear: people in their prime working years may be healthy and have all of the energy in the world, but they’re not safe from the threat of a disability.

It’s a question that many people ask.  If you’re asking yourself this question in the new year, then consider this…

1. Nearly one out of every three workers over age 30 will suffer a disability lasting three months or longer at some point in their working career.

2. Nearly half of all home foreclosures are caused by an unforeseen disability.

3. More disabilities are the result of illness rather than accidents

4. Each year, about 70 percent of those who apply for Social Security disability benefits get denied.

A lot of people don’t understand the difference between short term disability and long term disability. Here’s a quick explanation. If you have any questions about disability or term life insurance, feel free to post a comment and I’ll get back to you. Short term disability is insurance that helps provide partial income protection when an individual cannot work due to disabilities that are not job related.  Whereas long term disability coverage takes over where short-term disability insurance leaves off, typically six months after the policyholder becomes unable to work. Like short term disability insurance, long term policies pay a portion of the individual’s pre-disability monthly pay.

If you need instructions on how to post a comment, see the FAQ section above.  It’s easy!

In this time of economic strife, insurance is especially important, namely term life insurance. This type of insurance can be invaluable for families with little disposable income after a family member dies.

Most experts agree that when deciding on the terms of a term life policy, the value should be at least 10 times the amount of your gross salary. Of course, this is a generic advisement, but if you can afford it, 20 times your annual salary can keep your family’s lifestyle at the same level as they were before your loss.

When buying life insurance, certain other conditions should also be taken into consideration such as any pensions that will be received as well as social security benefits that the survivor will collect. In addition, a mobile or portable life insurance policy is of vital importance so that you can take the policy with you if you were to lose your job or change careers.

As for other kinds of insurance that are must-haves in a declining economy, individual disability insurance can be imperative in the event that you become disabled and can no longer work. Usually larger companies provide this type of coverage, protecting your income and allowing you to receive 65 percent to 70 percent of your salary. However, after taxes, the actual income you will receive is closer to only 45 percent, so keep this in mind when you consider whether or not your coverage will realistically support you in time of crisis.

Any other recommendations on essential insurance policies for an economy heading into a downturn?

To help Americans better plan for their healthcare costs in retirement, Fidelity Investments estimates that a 65-year old couple in 2008 will need $85,000 to insure against long-term care expenses.

In just 10 years, approximately 50 million Americans will be over the age of 65. More than half of these individuals will require at least one year of long-term care, and 20 percent will require more than five years of care before they die. With the average cost of a one-year stay in a private room in a nursing home estimated at more than $76,000, not preparing for these potential costs can result in personal and financial burdens for family members.

In fact, between 75 and 80 percent of all long-term care given in the United States is provided by a family member. New Fidelity research finds that currently there are 29 million Americans providing informal long-term care to family members, and spending an average 34 hours per week providing this care, nearly equivalent to a full work week.

A lot of seniors have the idea that Medicare would cover their long term care expenses.  That actually isn’t the case.  In fact, Medicare does not pay for long term care and people may want to consider private insurance.

So what does Social Security and Medicare pay for? Medicare, a separate program run by the Centers for Medicare & Medicaid Services, helps pay for inpatient hospital care, nursing care, doctors’ fees, drugs and other medical services and supplies to people age 65 and older, as well as to people who have been receiving Social Security disability benefits for two years or more.

Many baby boomers incorrectly believe they have disability income protection, according to a new survey conducted by Harris Interactive(R) on behalf of America’s Health Insurance Plans (AHIP). Most say that disability insurance is important to protect their income, but nearly half say they do not have any disability income protection.

The survey assessed baby boomers’ perceptions about the need for disability income protection. Most baby boomers (56 percent) say that disability income insurance is important to protect their income should the primary wage earner in their household become disabled and unable to work for an extended period of time. Only nineteen percent said that disability insurance was not at all important.

However, nearly half of baby boomers acknowledge they do not have any form of disability income protection. According to the survey, only 52 percent of baby boomers say they have either short-term or long-term disability insurance.

Continue reading “Many Baby Boomers Incorrectly Believe They Are Protected Against the Risk of Disability”

May is Disability Insurance Awareness Month, which is coordinated by our friends at the Life and Health Insurance Foundation for Education (LIFE) in order to raise awareness among consumers of the need for adequate plans of Disability Insurance.

According to the LIFE Foundation, unless a person is extremely wealthy or virtually penniless, the income the person earns is the heart and soul of his/her livelihood.  It provides the means to buy food, clothes, a home, education, recreation, and hopefully a decent retirement.  But the chances of sustaining a long lasting earned income cash flow is dependent on the consumer staying alive and remaining unencumbered by income interruptions, the major cause of which is getting sick or hurt and being in a state of disability, whether permanent or temporary.

Earned income is most peoples’ only tool.  Even a modest level of income earned week after week, month after month, and year after year is a very formidable weapon to be used against the ravages of destitution.  A person, age 35, who earns $50,000 per year, will have earned over $1,500,000, even if he never gets a raise.  At $100,000, the figure becomes $3,000,000 and at $250,000 the accumulative total is $7,500,000.  Two factors need to be explained.  One:  Americans don’t save money, according to the U.S. Department of Labor.  The saving rate last year was 0.05%.  The other factor is:  due to improvement and inflation most people will increase their income by 5% each year.  The 35 year old who increases income 5% per year over his $250,000 annual income will have produced $16,609,700 by age 65.  A formidable sum!

These glimpses into earnings makes it obvious that adequate income cash flow is indispensable if a life is to be lived without desperation or failure.  The only dependable source of adequate income cash flow is from a well designed Disability Income Insurance Plan.  It’s like having money in a wall safe.

It is instant-you don’t have to save over a lifetime.

It is TAX-FREE.  This is valuable even to wealthy people.

It is always available quickly, and each time one is sick or hurt.  It is not a fund that once used is gone forever such is the case with savings and investment accounts.

Nearly 49 top rated insurance companies offer quality disability insurance in adequate amounts to perform the task.  It is available from over 256,000 licensed, professional insurance agents, brokers, and financial planners.

According to a study by Metlife, when asked to list their assets, many people are likely to fail to include their ability to earn an income.

• Only 58% of full-time employees say they have disability income insurance protection.  Nearly half of those, 41%, admit they don’t know how much protection they have.
• The majority of working Americans (59%) have taken no steps to determine their households’ needs with regard to disability coverage.
• For single people – who likely have only their own income to rely on – and young families – the majority of whom (59%) admit to living paycheck to paycheck – the loss of steady income can be especially devastating.

It’s something we all take for granted.  The ability to work.  Just think about it.  What would you do if you weren’t able to earn money for ninety days, a year or even longer?  How would you pay for your mortgage, food, cars and other bills?  How long could you and your family survive?

In the event that an individual becomes unable to work because of sickness or injury, disability income insurance can replace a portion of lost income, helping to ensure that day-to-day living expenses are covered and that long-term financial goals can be addressed.