Half would be in trouble after only one month with a disability
MILWAUKEE, May 6, 2015 /PRNewswire/ — Unplanned financial emergencies and medical expenses ranked among Americans' top three financial fears, according to Northwestern Mutual's 2015 Planning & Progress Study.
While an unexpected disability can transform both fears into an instant reality, people are taking few steps to protect their income and savings. In fact, sobering research from Life Happens revealed that nearly half of Americans would find themselves in financial trouble in just one month or less after incurring a disability.
"Unfortunately, people tend to underestimate their risk of disability as well its potential to wreak havoc on both physical and financial health," said Steve Sperka, vice president, disability insurance for Northwestern Mutual.
"May is Disability Insurance Awareness Month and a good opportunity for Americans to examine their financial plans to assess if they are adequately prepared to manage the financial implications of short or long term disability." Disability insurance is specifically designed to replace a significant portion of income and help with expenses and lifestyle needs if sickness or injury prevents a person from earning a living.
Cost & Longevity up, while safety nets ebb
However, as both costs and longevity continue to increase while retirement safety nets ebb, the considerations around disability extend beyond routine obligations. "Our 2015 Planning & Progress Study found that having insufficient savings to retire comfortably is a top financial concern for Americans," continued Sperka. "Disability insurance can help preserve an existing nest egg and also provide the flexibility to keep contributing to retirement savings, reducing the need to play catch up later."
Sperka advises the two thirds of Americans who do not have access to disability insurance through their employer to consult with a professional regarding their options. For those whose employers offer group disability coverage, he suggests adding an individual supplemental policy to further minimize the potential for financial disruption. Aside from paying a monthly benefit when an individual is unable to work, an individual policy is portable if an employee changes jobs.
Visit NorthwesternMutual.com for a variety of tools and educational resources, including the video "Help Protect Your Paycheck with Disability Income Insurance," that provide additional information on planning for the possibility of a disability event.
About Northwestern Mutual
Northwestern Mutual has been helping families and businesses achieve financial security for nearly 160 years. Our financial representatives build relationships with clients through a distinctive planning approach that integrates risk management with wealth accumulation, preservation and distribution. With $230 billion in assets, $27 billion in revenues, nearly $90 billion in assets under management in our investment products and services, and more than $1.5 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to 4.3 million people who rely on us for insurance and investment solutions, including life, disability income and long-term care insurance; annuities; trust services; mutual funds; and investment advisory products and services.
Northwestern Mutual is recognized by FORTUNE magazine as one of the "World's Most Admired" life insurance companies in 2015. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI, and its subsidiaries. Northwestern Mutual and its subsidiaries offer a comprehensive approach to financial security solutions including: life insurance, long-term care insurance, disability income insurance, annuities, life insurance with long-term care benefits, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company.