By Moshe Alpert
Northwestern Mutual

Do you have insurance for your most important financial asset? You may think you’re covered because you have insurance for your car, home, or even jewelry. Unfortunately, if you don’t have adequate disability income insurance, you may not be protecting what matters most — your paycheck.

The reality is that few American workers are financially prepared to weather an injury, illness, or unplanned medical expense. In fact, according to the 2016 Northwestern Mutual Planning & Progress Study, 85 percent of Americans report feeling financial anxiety today. Much of this anxiety can be traced to the fear of the unknown. The study cites the top two financial fears as having an unplanned financial emergency and having an unplanned medical expense due to an illness. Fortunately, conquering the fear of the unknown is easier when you’re able to separate fact from fiction.

Make sure you’re protecting your financial future by acquainting yourself with these three disability insurance myths:

Myth #1: You have enough coverage through your employer’s benefit plan.

Truth: If you’re covered by an employer-sponsored short- or long-term disability plan, you’re more fortunate than most. Even if you are provided group coverage, such coverage alone only replaces a portion of your income. Many group plans only cover 50–60 percent of your base salary. That means, if you’re currently making $60,000 annually, 60 percent of that would be $36,000 and if the employer is paying for your coverage, the final take-home would be reduced even further after taxes. In addition, most employer-sponsored plans are limited to covering short-term disability which means your benefits may only pay for a short duration. Also consider that your employee benefits end when you leave the company.

If you’re unexpectedly faced with illness or injury, supplemental coverage can help bridge the gap between what’s covered by your employer’s group policy and your monthly take-home pay. Supplemental coverage could ensure you’re better poised to: maintain your current standard of living and minimize the impact on your long-term financial security. In addition, supplemental coverage moves with you if you change jobs, covers you between jobs, and provides critical income protection if you’re self-employed.

Myth #2: Disability won’t happen to you.

Truth: Even if you’re young and healthy, according to the U.S. Social Security Administration, one-in-four of today’s 20-year-olds will be disabled for three or more months at some point in their career before reaching age 67. In addition, the word disability itself may not be what you think. Individual disability income insurance may provide coverage for common conditions like back pain, migraine headache, pregnancy complications, or depression. Consulting an experienced financial professional can help to ensure your policy includes all you need to continue meeting your financial obligations in the event of a disability.

Myth #3: Disability insurance is expensive.

Truth: In most cases, you can protect your income for less than the cost of a daily cup of coffee. On average, individual disability income insurance costs $24 and $47 each month for males and females respectively—while coffee typically costs $76 each month.

[Typical individual disability income insurance costs range from $25.77/month to $35.19/month. Typical coffee costs $72.52/month. Eligibility for individual disability income insurance, additional policy benefits and qualifications for benefits is determined on a case-by-case basis]

Thankfully, protecting your most important asset is an easy two-step process. First, check with your employer to discover if it provides any group disability coverage. Second, consult with a trusted financial professional who can help you to determine how much additional coverage you will need and understand the language in your policy.

Taking these simple steps to ensure you’re adequately covered will help to relieve your financial anxiety as you’re protecting your most important financial asset. You’ll be glad you did.

Disability income insurance policies contain some contractual features and optional benefits that may not be available in all states. The ability to perform the substantial and material duties of your occupation is only one of the factors that determine eligibility for disability benefits. These policies also contain exclusions, limitations, and reduction of benefit provisions. Eligibility for disability income insurance, additional policy benefits, and qualification for benefits is determined on a case-by-case basis. To be used with forms ICC16.TT.NCDI.(0916), ICC16.TT.GRDI.(0916), or state equivalent. Not all contracts and optional benefits are available in all states.

Article prepared by Northwestern Mutual with the cooperation of Moshe Alpert. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) (life and disability insurance, annuities, and life insurance with long-term care benefits), Milwaukee, Wisconsin, and its subsidiaries. Moshe Alpert is an agent of NM based in Cedarhurst, NY. To contact Moshe Alpert, please call 718-644-1594, email or visit

Northwestern is recruiting for its new office location. If interested in a full-time advisor position, please call 718-644-1594.


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