Disability Insurance – Serving Its Purpose
Imagine for a moment not being able to work for a living and losing the ability to perform the duties of your occupation because of an unforeseen accident or chronic illness. Your ability to earn a fair living is arguably your greatest personal asset. A regular income not only allows for the reasonable necessities of life (food, shelter, clothing, transportation, insurance premiums, education, etc.), but it also allows you and your family to maintain the lifestyle to which you have grown accustomed.
Disability insurance is always undervalued. Ample amounts of disability income coverage should be the cornerstone of a well-planned, balanced corporate insurance strategy or personal financial portfolio. Those of us who work every day recognize the need for a regular paycheck, but many fail to see the potential for economic disaster if even a short-term disability were to arise. Most Americans across all income levels, tend to lack any substantial form of savings, and therefore a steady and proportionately significant income stream is the only logical saving grace from financial collapse. Astute analysts will agree that modest group policies are not sufficient in terms of benefit levels for most American employees. Additional layers of personal and excess disability income insurance should be recommended to all clients who are not insured to at least 65% of their income.
We sell disability insurance because it keeps income earners from losing everything for which they have worked when they lose the ability to make a living. We sell disability insurance because its benefits protect families. We sell disability insurance because of the fundamental human need to financially survive.
Please take the case of a prominent surgeon. Dr. H., like most physicians, was well informed financially and accepting of his insurance advisor’s prescription of additional disability insurance in excess of his employer-paid group long-term disability coverage. He acquired an additional policy with a traditional U.S. carrier, but with an annual income well over $1,000,000, the good doctor was severely underinsured. His agent turned to Petersen International Underwriters for assistance with high-limit excess disability coverage. Underwriters were willing to participate to 75% of his income and were able to secure supplemental, specialty-specific, own-occupation coverage with a monthly benefit amount of $37,000.
Several years later, Dr. H. was diagnosed with degenerative disc disease of the spine. He lost the ability to stand on his feet for significant periods of time and was no longer able to perform the surgeries for which he was employed. Dr. H. went on claim due to total disablement as a surgeon and received the maximum benefits his multiple disability policies allowed. The supplemental disability policy provided Dr. H. and his family with significant income for many years.