Are You Covered? PPEs Are Not Enough
Lisa Scholnick Addresses Disability Income
If you have any doubt that mobility doesn’t affect lifestyle, just stop for a moment and take a look around. Covid stay at home orders present a perfect example. You don’t need to suffer an illness or injury to feel the pinch.
Nor do you need to have school age children that don’t immediately return to school in the fall to remain at home even longer. For whatever and all reasons, when you aren’t working, you aren’t earning income. Life today and all of your tomorrows are affected. The real impact on spendable cash flow is immediate and often unforgiving.
Some fear that draining savings will force the need for longer working careers. Savings distributions today may miss the next stock market recovery. And perhaps the worst and most obvious prediction of all, the tremendous increase in national debt load is bound to raise future taxes reducing the value of retirement income from IRAs and pension plans. Life is very different; protect your lifestyle.
For those in medical professions and on the front line, your risk of loss is ever greater. You see it around you and hear the stories from friends and colleagues of lives changed forever. Many are searching for the medical cure. Some of them are protected financially - are you?
We are talking about disability income protection - where your primary health care provider determines you cannot perform your unique specialty as a result of sickness or accident, regardless of origin. A different cause, but immobility nonetheless, and a much easier threshold to meet than a government mandate. Disability insurance provides dependable tax free income. The ONLY way to protect your current savings and retirement lifestyle is to leave accumulated balances intact to grow larger. Investment pros refer to “Sequence of Returns” and the impact of ups and downs in your portfolio. Downs can occur from distributions just as easily as losses, and unfortunately cause even bigger problems.
More immediately, Covid (and all nations’ stimulus efforts) has increased the world’s debt load, pushing riskless assets (treasury yields) to near zero levels, for years to come. This has increased reserve strain on U.S. carriers, causing many to increase product costs or discontinue certain offers all together.
The impact on the life industry from Covid will be increased underwriting due diligence for future buyers. Those previously infected may be disappointed. Apparently, the vast majority of those infected survive; but many are presenting with other issues, not previously on their radar, impacting tissue integrity, for example, and impacting actuarial morbidity.
If we have hit a nerve, that is good. Review your existing coverages, highlighting benefits and deficiencies. If you don’t have coverage, don’t wait, and certainly don’t rely of your employer to protect you. The typical large employer’s response to downturns in previous economies was to reduce or eliminate health and welfare benefit plans.
Be safe, and be secure. Know what you have to bank on - families expect nothing less.
- Lisa Scholnick RHU, LIC, LisaCoLLC
