Income Protection Insurance is designed to replace your lost income if you cannot work due to an extended illness or injury.

There are two ways to obtain Income Protection Insurance: one is to buy an individual policy, and the second is through your employer, if offered by your employer.

The pros and cons of each are as follows.

Pros:

• You keep it as long as you are paying the premiums.

• You have the ability to have your benefit increase without going through health underwriting, within limits.

• The monthly benefit is easily customizable.

• An inflation rider is normally included, therefore your benefits increase as your income needs increase.

• Benefits are paid until your normal Social Security Normal Retirement Age, regardless of your ability to work in another occupation.

• Benefits are tax free when paid.

• There are other benefits beyond those listed above.

Cons:

• You must go through health underwriting and could be declined.

• Premiums are expensive, so it is better to buy a policy when you are younger rather than older.

• Pre-existing conditions could be excluded from coverage.

Employer Based Income Protection Insurance Policy:

Pros:

• Your employer may pay all the premiums, and if not, the cost generally is lower than an individual policy.

• Health underwriting may be waived or be in a simplified format.

Cons:

• Very basic coverage, however some coverage is better than no coverage.

• Rarely does it include an inflation protection rider.

• The plans usually have a benefit cap which may not provide adequate coverage.

• Benefits are taxable.

• Coverage ends when employment ends.

The most common causes of lost wages due to an extended illness or injury are as follows:

Some people think that Social Security Disability will take care of them if they can longer work due to an accident or illness. Applying for Social Security Disability is not an easy task, nor is it easy to qualify for benefits.

You can learn more about Social Security Disability at www.sss.gov/beneifts/disability

People often think a disabling injury or sickness is a rare thing and something they think would never happen to themselves.

Over my long career, I have seen and worked with friends whose spouses were on total disability, as well as former co-workers. In each case, if you looked at those individuals you would think they are ok, but in reality, they can longer work due to a significant health event.

In two different situations, a single back injury ended accountants’ careers because they could not sit at a desk for any extended period of time to work.

One of my co-workers and his family were in a head-on collision. They all walked away from the accident, however, my fellow agent had a traumatic brain injury that ended his career and the ability to work in any capacity. His TBI was life-altering.

The wife of one of my best friends from high school had a high paying, high-level job in finance. In her early 30’s, while pregnant with their last child, she had a brain aneurysm that ended her career thirty years ahead of their plans. She has been receiving disability income benefits over that long time frame.

Think very carefully before you say no to having income protection insurance.

We work with multiple insurance companies so we can match the correct company to your occupation, age, and health status.

What Is Your Plan If You Got Sick Or Hurt?