Arlington, Va. – Most people’s plans for the future – from buying a home to paying their children’s college tuition to saving for retirement – rely on the assumption that they will be able to work and continue to earn an income until they retire. Despite this fact, far too many Americans continue to overlook the true value of that income. According to a new survey from the nonprofit LIFE Foundation, only one in six working Americans (16 percent) consider their paycheck to be their most valuable asset. What many fail to consider is what would happen to them and their families should they suddenly become sick or injured and unable to work.
The reality is that the financial consequences of suffering a disability can be far reaching. A 25-year-old worker who makes $50,000 a year could lose $3.8 million in future earnings if they became permanently disabled and were unable to work and earn an income. Yet, fewer than one in three workers in the private sector have long-term disability coverage through work, according to the U.S. Department of Labor.
“Most people don’t realize that they have a three in 10 chance of suffering a disabling illness or injury that could keep them out of work for three months or more,” said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. “Disability insurance makes sure that financial hardship doesn’t follow the physical and emotional toll that comes along with disability. It’s insurance for your income. When you think about it, your most valuable asset isn’t your home, car or jewelry. It’s what allows you to pay for all these things – it is your paycheck.”
ProtectYourPaycheck.org and “This Moment Made Possible by My Paycheck” Photo Contest
May is Disability Insurance Awareness Month, and in support of this important initiative, LIFE has launched a new educational website – www.protectyourpaycheck.org – to help raise awareness about the importance of disability insurance. As part of this larger campaign, LIFE also is sponsoring the “This Moment Made Possible by My Paycheck” photo contest. To enter the contest, people are asked to submit a photo and caption depicting a memorable moment made possible by their paycheck. The person submitting the best photo and caption will receive a $500 gift card. Enter the contest anytime in May through LIFE’s Protect Your Paycheck website or on LIFE’s Facebook fanpage.
How consumers can get started
A good rule of thumb is that if you work for a living, you need disability insurance. For the millions of Americans who lack this important coverage or think they may need more, LIFE offers the following tips for purchasing disability insurance:
Calculate the real costs of disability. Disability insurance can replace a substantial portion of your income when you become ill or injured and can’t work and earn a paycheck. To determine how much disability insurance you may need, visit the nonprofit LIFE Foundation’s Disability Insurance Needs Calculator at www.protectyourpaycheck.org/calculators.
Understand your options for obtaining disability insurance. For many, disability insurance options may be available through your employer. Many employers provide short- and/or long-term group disability insurance coverage either at no cost to the employee or on a voluntary basis in which the employee pays for the cost of the coverage. In addition, m any professional associations offer their members the opportunity to purchase disability insurance through a group plan. You also have the option of purchasing an individual disability insurance policy through a qualified insurance professional. No matter what route you take, it’s important to find out what kind of coverage is offered, the amount of the benefit and if supplemental coverage makes sense for you. To better understand the options , visit www.protectyourpaycheck.org.
Understand the role your age and health status play. If you are older or have health problems, employer-provided group disability insurance can be easier to qualify for and more affordable than individual policies, which typically have stricter underwriting rules.