By Erik S. Sherman - John Hancock South Florida Group
Zak Mann - National Planning Corporation
Would you ever show up in the courtroom–or at a client meeting–without properly preparing your case or researching your client’s situation? Of course not. In fact, for most lawyers, the idea of being poorly prepared at a crucial moment is the stuff of nightmares.
But no matter how well you prepare your cases, there’s an all-too-common scenario that you may not have anticipated fully: what would happen if you were to become disabled. Perhaps you believe that you’re fully covered by a group policy your firm has purchased. However, the truth is that while group disability income insurance is often relatively inexpensive and easy to administer, it can also fall short just when you need it most–leaving you in for some unpleasant surprises when it’s too late to correct the situation.
Furthermore, disability may be far more common than you imagine. Even if you’re young and careful, it could happen to you–through an accident… an injury… or a lengthy illness. And in fact it does happen–probably much more often than you might think.
According to one study, although most people believe they have only a 16 percent chance of becoming disabled during their working years1, the startling reality is that:
If you’re under age 35, chances are one in three that you will be disabled for at least six months during the course of your career.2
Men have a 43 percent chance of becoming seriously disabled during their working years.2 Women have a 54 percent chance.2
At age 42, it is four times more likely that you will become seriously disabled than that you will die during your working years.2
Want to be better prepared? Consider the following.
Learning to speak the lingo
The right disability income insurance (DI) policy can help you keep your household going, even if you suffer a long-term disability. But before you go shopping for a DI policy, you need to know what features to look for–and the language the insurance industry uses to describe them. The following terms are part of the language describing high-quality policies, and are what you should look for to get coverage you can count on:
Non-cancellable: To avoid the possibility of losing your coverage just when you need it most, choose a policy that’s non-cancellable and guaranteed renewable to age 65–with premiums also guaranteed until age 65. With group or association group coverage, you run the risk of being dropped and left unprotected at a time in your life when, due to your age or to a change in your health, it would be very difficult to qualify for coverage from another provider.
Conditionally renewable for life: Although premiums may increase after age 65, your policy should be renewable for life, as long as you are at work full time.
“Own-occupation”: Own-occupation or “Own-occ” coverage defines “totally disabled”–and therefore eligible for benefits–as being unable due to sickness or injury to perform the material and substantial duties of your own occupation even if you are at work in another capacity. As a highly skilled professional, who has invested so much in education and training, you want to make sure you have genuine own-occupation coverage… so that even if you can teach, for example, in your field–but cannot practice law–you are still eligible for benefits. Group coverage is rarely true own-occupation coverage.
Residual Disability coverage: Through a rider, a good individual DI policy can provide you with protection against the income loss you may suffer as a result of partial (residual) disability–even if you have never suffered a period of total disability. This kind of residual coverage is not available with most group plans.
A choice of “riders”: Riders offer optional additional coverage such as Future Increase Options, Automatic Increase and Cost of Living Adjustments, or “COLA.”
Having the right DI coverage could be vitally important to your economic well-being in the future–and help protect one of your most valuable assets: the ability to earn an income by practicing law.
In the case of DI protection, as in your legal work, a little extra planning and research in advance could prove invaluable at a later date. The truth is, successful professionals often need far more complete DI coverage than is provided through their firm’s group policy or through association coverage. How does your coverage stack up?
1 Gallup survey conducted for UNUM Corporation (508 respondents ages 30 to 65), reported by Best’s Review.
2 “Why Disability” booklet, published by National Underwriter.
By Erik S. Sherman - John Hancock South Florida Group
Zak Mann - National Planning Corporation
1101 Brickell Ave. 16th Floor, North Tower
Miami, FL 33131
305-579-4026
www.erikssherman.com
South Florida Legal Guide 2011 Edition