Life Line


« THINK YOUR EMPLOYER HAS YOU COVERED? THINK AGAIN! | Main | A Different Kind of Disability Insurance »

Uncle Sam Is Not a Sugar Daddy

By David F. Woods, CLU, ChFC, president of the LIFE Foundation

Nor is he a BIG BROTHER or a SOB SISTER.

The Federal Government does its best to take care of our neediest citizens, but despite cries of “welfare state,” it really provides only a basic safety net for the most urgent needs of the American people.

Providing income in the event of disability is an example. Many people are not aware that the Social Security Administration may provide an income to qualified beneficiaries if they are unable to work and earn an income. The good news is that it may. The bad news is that it probably won’t. Here’s what the law says:

Under the Social Security Act, "disability" means "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months."

Statistically fewer that 4 in 10 people who apply for Social Security Disability payments actually receive any. Those are pretty poor odds with which to gamble your future income.

According to actuarial data, nearly one out of three of us will be disabled for 90 days or longer before we reach age 65. And that disability will last an average of 2 years! Without proper planning, not only would you lose your income, but you would almost certainly go through your savings, your 401(k), etc. You might even have to sell your house, your car, etc.

Is that what you want?

May is Disability Insurance Awareness Month. It’s a good time to contact an insurance professional who is knowledgeable about all forms of disability insurance – government, employer provided and private. By understanding what you would get from all three and under what circumstances, you can create a safety net that will guaranty your income will continue no matter what happens to you.