I have a client that we will call Joe. Joe's father called me one day last year and said he needed to ask me some questions: "Joe had a stroke last week and we wanted to call and discuss his insurance." I asked how serious it was and was told, "he is paralyzed from the neck down at the moment."
This is the phone call that, as a financial planner, you hope you never receive. Joe is 41 years old, has 2 young children, a spouse who takes care of the household, and he runs his own business. However, these phone calls are why I always discuss disability income protection with potential clients and clients. Everyone wants to talk about the stock market and investing. If it's not the market, then it's how I can help them pay less taxes each year. Occasionally, people even want to talk about life insurance, but I can count on one hand from thousands of meetings how many times someone has said they wanted to talk about disability insurance. Investments, taxes and life insurance are all very important and we talk about them, but they aren't going to matter much if you lose your ability to earn an income. Many working people are not able to live off of assets and thus need their income.
I've heard every excuse. "I have it through work." Maybe, but in my opinion it's almost always just 50-60% of your income. "I'm in great shape." It doesn't matter what kind of shape you are in when someone is texting and driving. Or you get a diagnosis of a neurological disorder. "I don't do dangerous activities." The majority of claims are paid for illnesses, not accidents. "My spouse works." Great, do you all live and save for retirement solely on his/her income? "We could live off of less." Why don't you live off less now? Is that really what you want for your family? How about the additional medical expenses? "My family would help." Have you discussed this with your parents, brother, sister, whoever, to see if they have it in their retirement plan to help your family whether your disabled or not?
All of those sound good, but should they be considered as good excuses? Everyone thinks about if they die, but rarely do we think about if we are sick or hurt and can't work. When you die and have adequate life insurance, your family or business can pay off debts, set money aside for education, and produce income off of the remaining principal. But when you are disabled, there are no windfalls to provide those items. Your mortgage(s), car payments, business loan, etc...