Disability Insurance

Disability Insurance can arguably be the most important insurance you may wish to consider. When calculating your earning power over a number of years, the relization of how much a disability can impact ones financial demise is evident.  Those of us who are over 50 and  in our highest earning years can also suffer a significant loss. Group plans on many occasions fall short as long term disability may not be covered.  Evaluating the risks and implementing a plan will greatly alleviate the impact on ones current and future well being. 

Case Study

Silvia is age 38 and is a holistic nutritionist for a local Naturopath clinic. She earns $67,000 annually. Silvia is married to James a salesperson for an international manufacturing company. James’ annual earnings have averaged $90,000 for the past 3 years. The family has two children still in elementary school.

Financially Silvia and James rely completely on both incomes to meet their ongoing expenses. The loss of either one’s income could be financially crippling for the couple. If Silvia were to become physically or mentally disabled at age 39 with approximately 26 years remaining until retirement(age 65), her loss of working years income represents more than $1,700,000 when simply considering her current salary without any increases. For James, the income loss could represent more than $2,200, 000, if he were to become disabled for 25 years.

While the healthy spouse may continue to earn an income, the responsibility of caring for a disabled spouse and continuing a family life could have a direct impact on the healthy spouse’s income-earning capacity. In addition, the expenses associated with a disability are not easily estimated and could add to the family’s financial burden.

Securing a disability plan can dramatically affect your family’s financial health and ease the burden that life sometimes throws at us.