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Five Reasons to Own an Individual Disability Income Insurance Policy

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The Top 5 Reasons to Own an Individual Disability Income Insurance Policy

Your ability to earn an income is arguably your greatest asset. It’s the foundation upon which your lifestyle, aspirations, and financial security are built. Yet, when it comes to protecting this crucial asset, many of us overlook the importance of disability income insurance. While group long-term disability coverage through an employer offers some security, it may not be sufficient, especially for those earning more than $60,000 annually.

Here are the top five reasons why owning an individual disability income insurance policy is a smart move for safeguarding your financial future:

1. Comprehensive Coverage That Matches Your Earnings

One of the stark realities for higher earners is that group disability policies typically cap benefits, often leaving a significant portion of your income unprotected. An individual disability income policy can be tailored to ensure that a more appropriate percentage of your income is covered, offering peace of mind and financial stability when you need it most.

2. Portability

Your Policy Moves with You Job changes are a reality of modern career paths. With each transition, the safety net provided by employer-sponsored disability insurance disappears, leaving you uncovered during gaps between jobs. An individual policy stays with you regardless of your employment status, securing continuous protection of your income stream.

3. Tax-Free Benefits

Disability benefits received from an employer-sponsored plan are typically subject to taxes if the premiums were paid by the employer, reducing the net amount you receive. Conversely, benefits from an individual disability policy that you pay for with after-tax dollars are usually tax-free, providing you with a higher percentage of your actual earnings during a period of disability.

4. Customizable Coverage

Individual disability income insurance policies offer flexibility to tailor coverage to your specific needs. From selecting the benefit period and elimination period to adding riders that address inflation or provide for partial disabilities, these policies can be customized to fit your unique situation, offering a level of specificity that group policies can’t match.

5. Protecting Your Retirement Contributions

​While a disability might interrupt your salary, it shouldn’t derail your retirement plans. Some individual disability policies include riders that not only replace a portion of your monthly income but also continue contributions to your retirement savings. This feature is especially crucial for long-term financial planning and is not typically offered by group disability policies.

Your ability to earn an income is the cornerstone of your financial plan. Protecting this asset with an individual disability income insurance policy ensures that you and your family can maintain financial stability, even in the face of unexpected health challenges.

At TrueNorth Companies, we understand the intricacies of disability income insurance and are committed to helping our clients navigate their options to secure the most comprehensive and personalized coverage possible. Remember, it’s not just about protecting your income; it’s about securing your future and the future of those you care about. Connect with our team today! 

(Securities offered through Lion Street Financial, LLC (LSF), Member FINRA & SIPC Investment Advisory Services offered through Lion Street Advisors, LLC. LSF is not affiliated with TrueNorth Companies, L. C.)
Tax and Legal services are not offered by Lion Street Financial, LLC., or Lion Street Advisers, LLC