Chip loved his job. He started his business from scratch and had built it into a successful company with 10 employees. He loved to talk with people about what he did, and people loved doing business with him.
Chip’s financial advisor recommended disability income protection coverage as part of a financial planning meeting. When they applied, the carrier placed an exclusion waiver on the spine because Chip saw his chiropractor regularly for maintenance. Chip thought this was silly and did not want to take the policy. His advisor pointed out that the exclusion waived coverage on degenerative issues but would cover trauma to the spine. Reluctantly, Chip accepted the policy.
Eight years later, Chip was driving on the interstate and was rear-ended by a tractor-trailer driven by an independent with very little insurance. It crushed parts of his spine, and after several surgeries, Chip could walk but had unbearable pain. The medicines could only slightly alleviate his pain, and the side effects left him unable to concentrate due to headaches, and his speech was slurred to the point you could barely understand him.
Because his policy covered trauma to his spine, he received full benefits. Chip will never be able to work again, but these benefits allow him to still live with dignity. He is putting his youngest child through college; he paid for his older daughter’s wedding; and his wife didn’t have to go to work and is able to stay home and take care of him.
His life is far different than what he expected, but he is very appreciative that his advisor convinced him to buy this coverage even with an exclusion on it.
At age 39, John was living the dream. He was married with 2 healthy children and had his own small business paying himself well over six figures. But one day, John started feeling uneasy about his life and all the pressures on him.
He tried to be strong and didn’t seek professional help in dealing with his issues. Over the next two years, John’s anxiety grew into full depression. His wife found him in their back yard with a gun in his hand, contemplating suicide. She was able to talk him in to admitting himself to the psychiatric unit at their hospital.
After months of treatment, John was no longer a danger to himself, but he could never face the pressures of his old job. His father was a large animal vet, and John was able to work for him, exercising horses. The problem was that this was a minimum wage job, paying him a fraction of what he used to earn, not nearly enough to meet all his financial obligations.
Fortunately, John had the foresight to purchase individual disability income protection years before he became ill. He had a tax free monthly benefit of $10,000 with no limitations on how long benefits were payable for mental & nervous conditions.
John’s story is far from a perfect ending, but thanks to his disability benefits, financial pressures were not a worry. John and his wife ended up divorcing in an amicable split, and he was able to pay for his ex-wife to maintain her lifestyle. He was able to send both his children to college. And he feels good about himself because he is working, albeit in a low paying job.
So when you consider income protection, be sure you know what your benefits are for mental & nervous conditions. John never thought his life would turn out this way, but he sure is grateful he had the coverage.
We are all told there are certain types of insurance we must have. In fact, some are required like auto and homeowners insurance. We have all heard about life insurance as well. But many of us have never heard of disability or income protections insurance. Depending on where you are in life, it may be the most important coverage you can buy.
If you are younger in your career, be aware that 1 out of 4 20 year olds will suffer a long term disability (longer than 90 days). The probability of being disabled is 3 time greater than that of dying prematurely.
If you do not have anyone except yourself depending on your income, you have a greater need for income protection than life insurance. If you are too sick or hurt to work, you have to protect yourself. Should you die, no one else is adversely affected financially.
As you get older, your financial obligations often grow to include a spouse and children and mortgages. In this stage of life, life insurance is hugely important to meet your obligations if you die. Pause for a moment to think what it is that lets you meet all your obligations should you live. It is your income – the base for everything you have. So while life insurance is very important, income protection is still essential.
People will ask us when they no longer need their disability income protection. Our answer is whenever you can afford to retire tomorrow, you no longer need it. If disabled, you are retired right then. So be sure you are adequately protecting your income, whatever stage of life you are in.