Today I want to talk about a type of insurance that tends to get ignored, probably because it’s unpleasant to think about.

If you’re still working – or you know people who are still working – one type of insurance coverage that needs attention is disability insurance. 

Most of the time, people (if they even have disability insurance) get this type of insurance through their employer, and it’s usually highly inadequate because:

• It only covers your base salary
• It’s usually taxable
• It only covers about 60% of your earnings

Here’s a hypothetical scenario for you: If you make $100,000 a year and become disabled, your benefit would be $60,000, and it’s probably going to get taxed. (I say probably because there is a way to get around that if your employer allows for it.)

The point here is that for most people, especially the self-employed or people who get paid a bonus or commission, you must consider having your own disability policy. 

If you have a policy with your employer and your own policy, they can work together to give you much better coverage. 

So make sure you look at this carefully – because the likelihood of you becoming disabled is far more likely than dying, and the financial implications are worse. And, becoming disabled can mean many things, not just the horrible work accidents that you hear about. It could mean physical illnesses (like cancer, or stroke), mental health conditions like depression, or those fluke conditions that can pop up out of nowhere (like vision loss). 

If you have any questions about insurance and what you need, I can help you. Feel free to reach out by booking a quick 15-minute chat. Just call 513-563-PLAN (7526) or get a spot on my calendar here. 

Regards,
Nikki Earley, CFP®