Are You Covered?

Your ability to earn a paycheck is one of your most important assets, and life and disability insurance can help protect your family's finances in the event of death or disability. The following are answers to some frequently asked questions about life and disability insurance.

One in five 35-year-old men and one in three 35-year-old women in the work force will become disabled for at least 90 days before reaching age 65, according to the National Association of Insurance Commissioners. Because becoming seriously disabled can hinder your ability to work, purchasing disability insurance to compensate for lost wages may be your best protection.

Think about whether you or your family members could live comfortably if one of you passed away. While many companies offer life insurance as a benefit, it's often not enough to provide financial security for your family and may not be portable between jobs. Buying life insurance is therefore an important consideration.

Most disabilities are actually not the result of accidents, but are due to illnesses such as heart disease, chronic back conditions, mental/emotional disorders, and cancer. These kinds of disability-related illnesses can affect workers in all kinds of jobs.

Because Workers' Compensation only covers job-related illnesses, injuries, and deaths, many disabilities aren't covered that happen outside work. Social Security Disability Insurance (SSDI) benefits replace only a limited part of your salary and most disabled persons don't meet the strict SSDI eligibility requirements.

You need life and disability insurance if there is anyone who depends on you for financial support, including at-home spouse, young children, or aging parents. Older couples may also need life insurance to protect surviving spouse's retirement savings.

Purchasing life insurance for non-working spouse may also make sense for expenses such as child care, housework, and chauffeuring children that may need to be covered if the non-working spouse passes away.

Financial planners generally recommend buying enough life insurance to replace seven to 10 times your annual salary. You'll also want to provide for your family's immediate and ongoing expenses such burial costs, day care, tuition, mortgage, and medical bills. Reassess your coverage as your circumstances - such as marriage, divorce, or children - change.

For disability insurance, check first to see how much coverage you have through your job. The decide if you need more. If you're a small business owner, your finances may be especially at risk. You may want to consider purchasing group disability coverage for yourself and your employees. If you're self-employed, an individual policy is a good idea.

Everyone's situation is different. A DCU Financial Consultant can help you determine the level of protection that's right for you and your family. To learn more, call 800.328.8797, ext. 6621, or email financial@dcu.org.

DCU Financial
220 Donald Lynch Boulevard, Marlborough, MA 01752 • 800.328.8797, ext. 6077 • Email: financial@dcu.org
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