Set for Life exceeded my expectations. They took the time to get to know me and understand my needs. They provided excellent service and communicated well throughout the initial process and over the years.

— Dr. Alexander W., Anesthesiologist, New Haven, CT

Your ability to earn an income is your greatest asset. Yet most people are more likely to insure their home and car before their income.

Have you taken a look at your finances to see how you would fare without your income? Being aware of and planning for the potential financial impact that a long-term disability could have on your lifestyle is a responsible action for people earning an income to take into consideration.

Set up a budget.

The first step in developing a plan of action is determining your monthly income and expenses in the event of a disability. Use take home pay as income and fixed expenses to determine your needs. Keep in mind that individual disability insurance benefits are non taxable if you pay with personal income.

Be aware of other (or lack thereof) sources of income.

Your greatest asset is your ability to work and earn an income. Without that, alternative sources of income can help support you and your family’s lifestyle and financial security.

Potential Earnings to Age 65

(with 5 percent annual salary increase)
AGE  $50,000   $100,000     $150,000
30    $4,516,000    $9,032,000    $13,548,000
35    $3,322,000    $6,644,000    $9,966,000
40    $2,386,000    $4,773,000    $7,159,000
45    $1,653,000    $3,307,000    $4,960,000

When protecting your most valuable asset, ask yourself, “How long could I live on my savings if my income stopped this very second?” It’s shocking that in the richest nation in the world, many people are within six weeks of personal bankruptcy.

The financial impact of a disability.

Disability can drain your family’s savings and jeopardize your financial security. When you’re disabled, you may not only lose your ability to earn a living, you could also lose your savings, your retirement funds and even your home.

  • A recent Harvard study* found that over half of all personal bankruptcies and mortgage foreclosures are due to disability.

If you became disabled and your income suddenly decreased or stopped, would you be able to pay your bills? Could you pay your rent or mortgage, make your car payment, or continue contributions to your 401(k) account? Most people are too busy or just don’t want to think of the unthinkable.

  • A recent Parade Magazine study** found that most Americans are living paycheck to paycheck and have little or no money left after paying their everyday living expenses.

Planning ahead in case disability strikes makes good sense. Building a personal financial security plan can help you get an idea of the financial hardship disability may cause you and your family. It can also help you better prepare for the unthinkable.

Health Affairs, the Policy Journal of the Health Sphere, February 2, 2005

**Parade Magazine, April 24, 2006

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