A number of years ago there was a dive instructor that owned a successful business plying his trade. Returning home from work one evening he was hit by a drunk driver, resulting in severe injuries. Having to learn to walk again, and not having proper disability overhead expense insurance, the business closed within three months.
There is also the true story of a young two-income family that finally bought their dream home. On a hike the wife fell and broke her spine. The home was in escrow, approval based on two incomes. When the loan officer learned that the wife had disability insurance the home was saved.
Disability insurance is not about terms and conditions, it is about saving the dream home. Life insurance is not for the policyholder, but for the ones we love. Life insurance will never replace the deceased, but the added security allows the spouse and children to stay in the dream home, take dance lessons, and go to Disneyland.
Disability insurance may possibly be more important than life insurance. The chance of going to dance lessons and Disneyland are greatly reduced when one parent becomes disabled. And instead of the family receiving a lump sum from life insurance, the disabled becomes a total consumer without an income. Of course, most families will gladly take care of an injured or ill family member, but the reality is that the disability becomes a drain on the family… financially, physically, and mentally.
Disability insurance is not for the disabled individual. Like life insurance, disability insurance benefits are for the remainder of the family. The insurance provides money to help with lifestyle continuity. Insurance helps to pay the bills and to even take the children to dance lessons and Disneyland.
Life, as amazing as it is, is bendable and breakable. We always hope that a long term disability will never occur, but we all know that in a blink of an eye life can change forever.