Are You Prepared to Deal With a Disability?

​Imagine you’re involved in an accident that leaves you physically unable to work. Or imagine you develop a serious illness that forces you to take an extended absence from your career. How long could you support yourself and your family without the benefit of a paycheck? Do you have a strategy in place to manage disability risk?
 
Many workers don’t plan for disability because they assume it won’t happen to them. According to the Council for Disability Awareness, Americans on average believe they have only a 2 percent chance of suffering a disability. The truth is that the average worker has a 25 percent chance.1

While a long-term disability may not be likely, it’s certainly possible. If you haven’t prepared for the possibility, a disability could wreak havoc on your financial stability. Without a paycheck, you may struggle to pay your bills and cover basic expenses. You also may have to deal with medical expenses related to your injury or illness.
 
Fortunately, there are steps you can take to prepare yourself for disability risk. Below are three steps you may want to implement. If you haven’t protected yourself against the financial fallout of disability, now may be the time to do so.

Identify areas of your budget to trim.
One of the most effective ways to shore up your finances and deal with disability, or any emergency, is to cut back on your expenses. That doesn’t mean you need to cut back today. However, you may want to identify spending categories that you could cut quickly should you become disabled.
 
For example, you might cut back on travel, shopping and other discretionary expenses. Perhaps you might opt for a less expensive car that comes with a lower payment. You might even downsize to a smaller home that has a reduced mortgage and other costs. Develop a budget so you can track your spending and identify areas to cut back.

Maintain open credit lines.
While debt can often be corrosive to your financial stability, there are times when it can be useful. For example, debt is often necessary to fund things like a home or car purchase or an education. It can also be useful in an emergency if you don’t have many other options.
 
Identify a source of credit you can use for emergency costs in the event of a disability. Preferably, the debt tool should have a low interest rate and favorable repayment terms. For example, you may want to keep a line of credit open and unused in case you suffer a disability.

Explore disability insurance.
Finally, you may want to consider purchasing a disability insurance policy, which can pay you a monthly benefit to replace your income should you become disabled. The amount of your benefit will depend on the terms of the policy.
 
Some people resist purchasing disability insurance because they assume they’re covered by Social Security or employer benefits. Social Security disability benefits are often capped, so the payment may not be sufficient to replace your income. Employer disability coverage may only cover short-term disabilities or may require you to be totally disabled before you qualify for benefits.
 
Ready to plan your disability protection strategy? Contact us at First Fidelity Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.


1http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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