By PJ Shanley
Life Insurance
PJ Shanley
Life gets in the way. We are all busy. I will take care of that tomorrow.
Does this sound familiar? It seems like everyone we talk to these days is being torn in different directions.
Life is full of significant moments. Some of them you plan, like buying a home or starting a new business. Others you don’t, like divorce or becoming sick or hurt.
Either way, these are the events that shape your life. These are also the moments that may affect your financial stability. Just imagine what would happen if you or your partner became too sick or injured to work and your income suddenly stopped.
Believe it or not, according to the US Social Security Administration, one in four 20-year-olds will become disabled before reaching age 67.
Some of us may have protection at work through a group long-term disability plan, but do you realize that many plans only cover up to 60 percent of base salary and often don’t cover bonus, commissions or other incentive income? Also, the benefit amount under a typical group plan is taxable. Think about the potential consequences of a 40 percent reduction in your family’s monthly income. What would happen to your ability to save for retirement?
So what are your options to protect yourself and your loved ones?
Personal savings, Social Security disability insurance or employer-sponsored group long-term disability plans are great resources if you become disabled, but they could supply less than you’d expect. That gap would not only affect your day-to-day quality of life but could also impact your ability to reach your financial goals.
How will you know if this will be enough? Everybody’s financial situation is unique, so I suggest you review your monthly living expenses plus additional budget items, like saving for retirement, college or another important family financial goal. Think about everything you need your income to do for you not only for today, but also in the future.
Now that you know how much you need, do you already have disability income insurance coverage at work? Regardless of your coverage status, an individual policy that you personally own will stay with you throughout your career. Additionally, an individual disability income insurance policy can help replace a portion of lost earnings – or can protect a larger portion of your income by supplementing employer-provided coverage – and can help provide return-to-work benefits.
Obviously, there are many options out there. Like most things in life, the hardest part is usually getting started. The first thing you need to do is begin the process by sitting with your financial advisor and estate planning attorney to come up with the plan that will be best for you and your family.
PJ Shanley is a financial advisor with Barnum Financial Group and is a former member of the Orange Board of Finance. He can be reached at 203-513-6282 or pshanley@barnumfg.com. Securities and investment advisory services are offered through qualified registered representatives of MML Investors Services, LLC.