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    HOW INSURANCE CAN PROTECT YOUR INCOME

    Many people underestimate their chances of experiencing an illness or injury that would prevent them from working. In fact, more than one in four of today’s 20-year-olds will become disabled before reaching retirement age, according to the Social Security Administration. If you have a family to support, the loss of a paycheck can be devastating, especially in a single-income home.
     
    Thankfully, there are different types of insurance that can provide financial security — and peace of mind — if you are unable to work due to illness or injury.
     
    DISABILITY BENEFITS
    Many people believe Social Security will cover their needs if they become ill and can’t work. However, Social Security disability benefits are based on how much you’ve paid into the system over time. Workers’ compensation benefits, which you may receive if you were injured on the job, vary from state to state and only cover a percentage of your salary. These benefits help, but they are not a replacement for earned wages.
     
    EMPLOYER-SPONSORED INCOME PROTECTION
    Many employers provide long-term and short-term disability insurance as part of their benefits package. These benefits pay a portion of your income if you can’t work for health-related reasons. Short-term disability insurance usually kicks in immediately or after a short waiting/elimination period and covers you for a short period of time, usually six months or less. Long-term disability benefits require a longer waiting/ elimination period, typically six months or longer, and may cover you for years or even life.
     
    In many cases, employees have the option to purchase additional disability coverage to supplement their employer’s policy at the discounted group rate. Generally, I advise clients to get the maximum level of coverage they can afford through their employer. Often, employer-sponsored insurance plans don’t require you to prove insurability. If you’re older or have a preexisting health problem, that is an advantage.
     
    Since it’s harder and more expensive to get insurance as you age, preserving plans you purchased when you were younger may save you money and offer greater protection down the road.
     
    SUPPLEMENTAL INSURANCE COVERAGE
    The coverage offered through your employer may not be enough to provide for your spouse or family should you become disabled. An emergency savings account with the savings equivalent of six to 12 months’ worth of monthly bills is a great start but may not be enough if there’s a long-term illness. It is important to have an insurance plan in place.
     
    How much protection you need and what that will cost depends on many factors, including your income and debts, your age and health, and your family’s future needs. A conversation with a Regions Private Wealth Management advisor can provide valuable guidance about preparing your family for the unexpected.
     
    MEET THE EXPERT
    Anne Dalton is Vice President, Trust Advisor for Regions Bank Private Wealth Management. Contact her at 334-240-1345 or anne.dalton@regions.com.
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