American workers plan to keep working past Age 65. If you’re one of them, will your life insurance also continue?
The recent Transamerica Retirement Survey found that a majority of workers plan to work past age 65 (56%) and a majority (54%) plan to continue working after they retire. Just 39% believe they are building a sufficient nest egg, thereby underscoring the need to redefine “retirement readiness” in a way that is better suited to these new realities.
For the past few years, the Transamerica Retirement Survey has seen an emerging trend of workers who plan to work past age 65, including some workers who do not plan to retire. This year’s survey found that these expectations are prevalent to varying degrees among workers of all age ranges, not just older workers.
If you are one of these workers, your need for insurance after 65 to replace lost income in the event of your death becomes very important. You should review your current life insurance policies to determine if they continue past age 65, and if so, for how long and at what cost. Now may be the time to replace your term insurance with permanent insurance, which will stay in-force as long as you need it at a fixed price with no future increases. You could even choose a life insurance policy that includes long-term care benefits in the event you need extended care.
The effects of the Great Recession are reflected in workers’ changing expectations of retirement. Working past age 65 is an important opportunity to help to alleviate a retirement savings shortfall. Life’s unforeseen circumstances, such as a job loss or health issues, can have a devastating impact on the best laid plans. The “what if” scenarios are critical for American workers of all age ranges to include in their long-term preparations.
Nearly one in three workers (29%) expect to financially support family members other than spouses or partners, after they retire, while 13% expect to receive financial support from family in retirement. This makes the need for insurance after age 65 even more important.
If you had met me in the summer of 2003, my life would have appeared pretty much like yours—or your neighbor’s or sister’s or friend’s. I was a wife and a mother who was working full time and taking care of her family. Balancing the demands of all those roles was difficult sometimes, but I felt I was doing a pretty good job of it.
That is until I stepped into a crosswalk.
I was in New York City on business and was crossing the street with the light when an SUV turned the corner and came barreling into me. I was thrown 30 feet in the air. The impact shattered my pelvis, and every joint in my body was damaged. Instantly, my carefully balanced life came crashing down.
I went from being the caretaker to having to be taken care of. My injuries were so severe that doctors said I would never walk again. I was confined to bed for eight months and needed help with the basic tasks we take for granted like bathing, dressing and getting around. It took seven surgeries and three years of intense rehabilitation and work on my part to get to my “new normal.” During that time I was unable to work and earn a living or take care of my family as I had in the past.
One of the key factors that helped me navigate this difficult chapter in my life was my disability insurance.
Our family had relied on both my and my husband’s income. This accident and my being out of work for almost three years could have decimated us financially. Fortunately, I had planned ahead and had gotten disability insurance, which provided me with an income when I was unable to work. That influx of income allowed us to stay in our home, pay our monthly bills and the mounting medical bills. It also allowed me to hire someone to help with my kids and assist me, as well. I don’t know what we would have done without my disability insurance.
I feel extremely blessed. It’s amazing I lived and even more amazing that I lead an active life now—including keeping up with my two sets of twins!
I took out the disability insurance that I had then, and that I maintain now, because I value what I do for my family: I take care of their needs physically, emotionally, and I provide a paycheck to pay for our expenses. I’m worth it.
The bottom line is, if you need your income, you need disability insurance. And the only time to get it is before you need it.
Let’s get to the point. If you have a job and depend on that income to pay for all of life’s necessities, you need disability insurance. Sounds straightforward, right? But when only about a third of working Americans have this important coverage, there is definitely room for clearing up some misconceptions.
Here are 10 facts about disability insurance that may surprise you. We’ve made them “tweetable” so you can share: Simply click on the fact you’d like to tweet and the tweet will be generated for you. And be sure to follow us on Twitter at @LIFE_Foundation.
Think you’re smarter than your paycheck? Well, try your luck with the Paycheck Pop Quiz. There are five short videos, each with a question. If you get all five answers right, leave a comment and let us know and you’ll get a prize from the LIFE Foundation (scouts honor on this!).
So there I was, hanging out at the bar having dinner last Tuesday. Next to me was this guy with a flight of wine glasses. Out of curiosity, I had to ask, “What’s your favorite? He gave a long look at the three glasses and then said, “the pinot from Washington State. It’s light, smooth and silky.” We traded names and continued to chat for a while as we passed the night away. A while later, Monica, our server, asked if we were finished and we both said it was time to call it a night. Monica tallied up our bills and presented us our respective bills.
Both of us reached for our wallet. Right then, it dawned on me so I asked, “Hey, Tom, what’s the most important card in your wallet?” Tom looked into his wallet and pulled out a picture of his kids and smiled at me. “Tom, I get that—they’re important in your life! Which card though?”
Tom fingered through several credit cards and landed on his VISA card. He started to pull it out and then saw the one. “John, it’s my medical insurance card.”
“Yeah, that’s what I thought as well until …”
Tom quickly chimed in, “Until what?”
I paused and then said, “… until I learned that my medical insurance card paid everybody but me. You see, when I had my water skiing accident and was confined to a hospital bed, my medical card paid the hospital and doctors to put me back together, but it never, ever paid me my salary. That’s when I learned that the most important card to have in my wallet is my paycheck protection card—the card that shows I have disability insurance. That’s what paid me an income when I was unable to work.”
I’m sharing this story because I think Tom’s answer might be the same for most people, including you. So I want to challenge you to think about what would happen if you became sick or injured and unable to work? How long would you be able to make ends meet without your paycheck? In my case, the accident left me unable to earn an income for an extended period of time. I would have been in dire financial straits without the income that my disability insurance policy provided me. That’s why you need to protect your paycheck with disability insurance. Learn more at www.protectyourpaycheck.org.