Any person’s single greatest asset is his or her ability to make a living. The projection of your future earnings over your working lifetime reveals that your earned income is, for most working individuals, their greatest financial asset. Your financial security today and tomorrow, as well as many of your other financial plans, depends on the continuity of your salary or earned income. Your future earnings are dependent on your ability to work, and your remaining working years.

What if a serious disability caused by an accident or illness destroys your earning ability, how can it affect you and your family’s lifestyle and financial security while you’re alive?

Statistics show that the chances of suffering a long-term disability are much greater during one’s working years, than experiencing premature death. So for a group of men, the probability of suffering a long-term (90-Day) disability at age 35 is 18.9% between now and age 65, and on average the disability is likely to last 3.4 years.

It is worth noting that although certain accidents have their season, illness knows no season. With advances in medical science mortality rates have reduced and disability survival rates have increased, so the need for continuing income is even greater.

Prior to a disability your monthly salary covers your regular expenses. In future should disability strike, your financial picture will change dramatically. As your income declines and eventually stops, regular expenses continue and rise with extra costs, causing you debt exposure.

Self-employed individuals or professionals who earn income directly related to their time on the job, are clearly more at risk than a business owner who has partners.

Although the risk of income loss may seem greater for a professional or self-employed person, individuals who are employees with companies are also at risk. Employers may only pay employees for a limited time if they are disabled.

The self-employed and small business markets are two of the fastest growing segments of the working population – and some of the most susceptible to the perils of disability. If you can’t run your own business, who else is left to replace you and continue your salary, let alone pay a salary for a replacement manager?
Let’s look at the sources of the funds if one becomes disabled, and their onerous financial implications:

Source of money: Savings
The Problem: If you saved 5% of your income each year, six months of total disability could wipe out ten years of savings

Source of money: Borrow
The Problem: You may have difficulty securing a loan when you’re disabled. And where will the money come from to repay the loan?

Source of money: Spouse works
The Problem: Can one person be spouse, parent, employee, private nurse and breadwinner all at the same time?

Source of money: Liquidate assets
The Problem: Can you get a fair market price if you are forced to liquidate?

Source of money: Disability insurance
The Problem: Will you qualify?

The logical answer: An adequate amount of disability insurance must be purchased before anything occurs that impairs your ability to secure this essential insurance cover.