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Imagine for a moment what your life might look like if you lost one of your most important assets: your ability to earn an income. As unlikely as it may seem, according to the “National Underwriter 2008 Field Guide to Estate, Employee, & Business Planning,” the reality is that 45 percent of all people under age 40 will become disabled for more than 90 days before age 65.

The other side of medical advances

Major advances in medical sciences in recent years have resulted in substantial increases in the number of people surviving a critical illness. For example, the American Heart Association reported that 75 percent of men and 62 percent of women who suffered a heart attack would be alive one year later. Advancements in treatment have caused more forms of cancer to be viewed as chronic illnesses rather than terminal diseases. What once killed now disables.

The odds of becoming disabled may be surprisingly high, but just as surprising is how few people take steps to protect themselves from the financial blow of a disability. If it happens to you, are you financially prepared? How long would you be able to stay fiscally afloat without a paycheck?

Keep in mind that most monthly living expenses remain constant or may even increase during a disability due to medical bills and other related costs. If you have not already thought about and protected yourself against the financial impact of an unforeseen disability, here are some things to consider:

1. If you became sick or hurt and were unable to work, would it impact you and your family financially?

2. Without a continuing source of income, such as disability income insurance, how would you continue to pay ongoing expenses such as rent, mortgage, insurance, taxes, etc.?

3. How long would your current assets last if you suffered a long-term disability?

4. If you became disabled and had to tap into your retirement savings, would it jeopardize your planned retirement date or amount of income during retirement?

Most people recognize the need to protect a family’s financial future with life insurance in case someone dies prematurely. Yet they unknowingly overlook the need to protect against the greater probability of becoming disabled. If a disabling illness or injury made it impossible for you to work, how would it affect you? When you’re sick and trying to recover, the last thing you need to worry about is how you’re going to meet your financial obligations.

Is it worth the risk?

Whether you are single or married, salaried or self-employed, your ability to earn an income is one of your greatest assets. If you protect yourself against a potential financial loss by insuring your home, car or other valuables with property insurance, it makes sense to protect yourself against a potentially greater loss by insuring your earning power.

Disability income insurance is one of the most important forms of insurance protection you can buy because it protects your most important asset – your ability to earn an income. It ensures that you will receive monthly income if your ability to work is impaired by sickness or injury. Doing some planning now to protect yourself against the loss of income caused by a disability may make the difference between a financially devastating or financially stable future.

DAVID MAURY is a financial representative with the Northwestern Mutual Financial Network based in Philadelphia for The Northwestern Mutual Life Insurance Company, Milwaukee, Wis. To contact Maury, please call 215-981-1854 or e-mail him at [email protected].

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