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If you rely on your income, you need disability insurance

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Many people think that long-term disability insurance is just one more needless expense. However, those who depend on their income to help support themselves and a family needs it. In fact, our ability to earn an income is probably our most valuable financial asset. Why wouldn't you protect that, just as you safeguard other assets like your home and autos?

Many people assume that they don't need to purchase disability insurance because the Social Security Administration and individual states offer disability insurance. However, those are limited both in the amount they provide and the length of time they pay benefits. State programs generally cover people for no more than a year. Applications for Social Security disability coverage are rejected more often than not. Neither provides the percentage of income that long-term disability insurance does.

How much disability coverage should you have? Experts recommend coverage that pays a benefit of about 60 percent of pre-tax income. If your employer offers a group insurance plan, that may be the most cost-effective way to obtain insurance. For self-employed people, some professional organizations offer them. If neither of those is an option, check with insurance agents in the region where you live who specialize in this type of insurance. They can help you determine how much and for how long you need it.

Many people, particularly younger workers, assume they won't need it. They don't foresee becoming disabled. However, disability isn't just something that happens in old age. A car crash, sports accident or chronic condition can happen at any age to anyone, no matter what kind of physical condition they are in. Long-term disability insurance is a wise investment to make sure that if you are felled by injury or illness, you don't have to worry about how you will support yourself, your spouse and/or your children as you work towards recovery.

Source: AZCentral.com, "How to protect future income-earning ability" Eric Tyson, May. 22, 2014

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