The Social Security Administration has delivered sobering news: one in four of today’s 20-year-olds will become disabled before they retire. When an unexpected disability occurs, income vanishes but not financial obligations. My friend was an expert in robotic surgery until a debilitating illness forced him into retirement. Wondering if you should add disability insurance to your financial plan as an added layer of protection?
Man fishing on a lake
Strategic planning today can help you establish a sound financial future if your income stream runs dry.

After almost 20 years of practice, my friend, John*, became a well-respected Ob/Gyn. He had become an expert in DaVinci robotic surgery. In addition to performing it on his own patients, he travelled the country demonstrating the benefits of DaVinci and training others to use it.

During his down time, John loved to fish and watch his kids enjoy water activities. We spent many days each summer soaking in the sun and unhooking Walleye and Northern Pike and Crappies.

John is “retired” now, forced into by the age of 50 due to Multiple Sclerosis or MS. His disability progressed quickly before stabilizing, but it took away his ability to operate DaVinci. His gait changed and he became less stable. Not only could he not work, his fishing is far less frequent than it used to be.

As tragic as John’s situation is, it could have been far worse. John worked for an employer who valued its people enough to offer a strong group long-term disability or LTD plan. Since John met the requirements for benefits (and there’s no current cure for MS to allow him to recover), 60% of his salary is replaced until he’s eligible for full Social Security benefits.

Like all group LTD, however, there’s a maximum benefit that is far below John’s pre-disability earnings. John had a good neighbor and friend, however, who showed him the value of insuring the risk that his employer didn’t. The individual policy that John bought “covers the gap” and nearly 70% of all of John’s pre-disability earnings have been replaced.

His children have been able to attend college. He’s kept his home. And while John wishes every day that he could see patients (and fish!), he sleeps better at night knowing his financial foundation is solid.

*Not his real name.

IZALE founder and CEO, Scott Richardson has been delivering unsurpassed experience to clients for four decades, helping them execute optimal compensation packages. He delivers rich insight to clients by helping them structure compensation, nonqualified benefits, and both bank-owned life insurance (BOLI) and corporate-owned life insurance (COLI) plans.

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