-By Kyle Lum

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In times like these, good decisions matter. And when it comes to protecting a portion of your income from disability risks, it’s important to base your decision on the facts. In the case of disability, some of those facts might surprise you.

For example, more than one-quarter of today’s 20 year olds will become disabled before they retire.1 And if you are covered by a group disability income policy through your employer, you might not know about the likely gap between your policy’s benefits and your family’s actual needs.

To start with, the typical group plan only covers 50-70 percent of income. And benefits are often taxable; have maximum limits; and don’t cover bonuses, commissions or 401(k) contributions. In some cases, worker’s compensation helps bridge the gap, but less than 5 percent of disabling accidents and illnesses are work related. 2

If you run a business, your insurance protection should help cover its operating costs, possibly provide the funds for a partnership buyout, and protect a portion of lost earnings–either yours or your employees’.

The most common way to reduce the gap between existing coverage and actual needs is to obtain a supplemental individual disability income insurance policy. (Because you own it, you can take it with you throughout your career.) And the best way to make a good decision about that policy is to work with a trusted, trained financial professional.

No surprise there.

1 Social Security Administration, Fact Sheet April 2, 2014
2 Council for Disability Awareness, Long-Term Disability Claims Review, 2014 http://www.disabilitycanhappen.org/research/CDA_LTD_Claims_Survey_2014.asp

Disability income insurance products issued by Massachusetts Mutual Life Insurance Company, Springfield, Mass. 01111-0001. These policies have exclusions and limitations. For costs and complete details of coverage, please call Kyle Lum at 702.856.2341.

Provided by Kyle Lum, a financial representative with MassMutual Boulder Basin, a MassMutual Agency; courtesy of Massachusetts Mutual Life Insurance Company (MassMutual)