A pioneer in the disability insurance business named Harold Petersen once said, “Life is just a cash flow.”
For most of us the paycheck provides for our present needs, and with a little luck a way to save for retirement. Our present needs of food, clothing, a roof over our heads, insurance, car, and education are expensive, and increasing by the day. If anyone believes inflation is “only” 9% today it seems nobody told the grocery stores. 30% seems closer to reality. In any case, we are dependent on our paycheck to provide for our families today, hopefully enough left over for a vacation from time to time, and a portion deposited into a savings vehicle for our senior years.
The only way to create wealth accumulation and savings is if there is cash flow. The troubles begin when the paycheck ends due to a disability. Without disability insurance and income protection there is no way to continue planning for retirement. It is impossible to plan for the future without safeguarding the present.
What happens if we experience a short-term, long-term, permanent, temporary, partial, or total disability due to an illness or accident? What we should do is buy comprehensive disability income insurance in sufficient amounts BEFORE such a thing occurs. If you have disability coverage through work will the policy cover a minimum of 65% of your income? Probably not, which is why layering an “own occupation” personal disability policy on top of the work policy is recommended.
Most insurance company disability benefit calculations allow 410k employee contributions to be included which will keep most of the salary and retirement allocations intact when an employee becomes disabled.
Personal disability insurance equals sound financial planning, especially when it comes to retirement planning.