Do you have Paycheck Insurance?

 How long can you go without your paycheck?

Consider the following. . .

• 75% of Americans are living paycheck to paycheck according to a survey by Bankrate.com
• If you have saved 10 percent of your income each year, one year of being totally disabled could wipe out 10 years of savings.
• The Federal Home Loan Bank has determined the major cause of mortgage loan foreclosures is disablement of the mortgagee; 48% of mortgage foreclosures due to disability vs. 3% due to death.
• 3 of 10 workers entering the work force today will become disabled before they retire.

How long can you family last without your paycheck?

Common Myths:

1. Social Security benefits will take care of me if I am disabled.  Only 34% of people who applied for benefits from the Social Security Disability Insurance Trust Fund received benefits in 2013.
2. Workers Compensation will cover me. Workers Compensation only covers accidents or injuries on the job. Most disabilities are caused by off the job injuries or sickness.
3. I have savings to cover my disability. Great!!  But do the math; if you save 10% of your income each year for 10 years your savings would be depleted after only 1 year of a disability.
4. My Employer gives me Long Term Disability Insurance as a benefit. You should feel lucky as most employees do not have this coverage. Take as much as you are offered.  However if you make more than $75,000 a year this coverage is not enough!
   1. If your employer pays for this coverage then benefits you receive are taxable.
   2. Most plans cap the monthly benefit at $5000 per month. If you make more than $100,000 per year then you are getting less than 60%.  (Example: If you make $200,000 a year, your plan has a cap of $5000 a month in benefit and you are in a 28% tax bracket you will receive less than 25% of you salary not the 60% you thought you had.)
   3. Bonus income, overtime pay and other income may not be included.
   4. d.     You cannot take most disability insurance plans with you if you change employers.

For more information about Disability Insurance get our report SPENCER TIPS ON “How to Protect Your Family When You Become Disabled and What You need to Know About Disability Insurance.”

At Spencer Insurance Agency we have solutions! Call us today at 215-885-2200 to review your disability coverage.  Many of you making over $100,000 can purchase additional disability protection to supplement your group long term disability policy.  Don’t put your family at financial risk. Call us today!