For those who are working full time trying to accumulate wealth, their ability to work and make money is often their most valuable asset. For instance, someone who is 35 and earning $150,000 per year will typically earn almost $10 million dollars by the time they are age 65. This statistic assumes an annual 5 percent raise but it also assumes the worker remains healthy and able to work full time until retirement age.
This is a big assumption because 30 percent of workers will become disabled before age 65.* Most people mistakenly believe that accidents are the most common cause of disabilities. However, 95 percent of disabilities are caused by illness, not injuries. In fact, cancer is the second-leading cause of disabilities.**
One of the most universally accepted principles of financial planning is anyone who relies on their income to support themselves and/or their family, should insure that income through a disability income policy. Unfortunately, only about one-third of consumers, including small business owners, have disability policies to protect their earning potential.*
Those who work for large corporations may be covered by a group plan. However, if the employee switches jobs, they may no longer be covered by their new employer and even while they are covered by a group plan, the group benefit alone is typically not enough to replace a majority of their income.
The inability to work for even a year or two and the corresponding loss of income can have devastating financial consequences to a family. More than half of all personal bankruptcies and mortgage foreclosures are a result of a disability.
Variable Annuity policies can vary widely with many different features like own occupation and cost of living adjustments. A knowledgeable advisor can assist in designing the appropriate plan and can potentially get the insured policy discounts if they are aware of how to select the appropriate insurer and properly complete the application.
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