Disability Insurance

Protecting Your Most Valuable Asset—Your Ability to Earn an Income

What is your most valuable asset? Many people might say their home or their retirement savings. But the truth is, your most valuable asset is your ability to get up every day and earn an income. It’s the engine that powers your entire financial life—paying for your home, funding your savings, and supporting your family’s lifestyle. Disability insurance is designed to protect that engine. It’s “paycheck insurance,” providing you with a stream of income if you become too sick or injured to work.

At Fargo Life Group, Mark Wagner helps professionals, families, and business owners in our community understand this often-overlooked but critical piece of financial planning. An unexpected disability can be more financially devastating than a premature death, and having a plan in place is essential for true security.

The Uncomfortable Truth: Why Disability Insurance is Non-Negotiable

The statistics are sobering: the Social Security Administration estimates that just over 1 in 4 of today’s 20-year-olds will become disabled before reaching retirement age. While many people believe disabilities are caused by freak accidents, the vast majority are caused by common illnesses like cancer, heart disease, back problems, and arthritis.

Without a plan, a disabling event could force you to:

• Rapidly deplete your emergency savings.
• Incur significant credit card debt.
• Cash in retirement accounts, losing years of growth and paying penalties.
• Sell your home or other assets.
• Rely on family and friends for financial support.

Disability insurance creates a financial backstop, allowing you to focus on your recovery without the added stress of a financial crisis.

Individual vs. Group Disability Insurance: Understanding the Difference

Many people in Fargo have some form of disability coverage through their employer. While this is a great benefit, it’s crucial to understand its limitations.

Group Disability Insurance (through an employer):

• Benefits: Typically offered at a low cost or for free by an employer.
• Limitations: The coverage amount is often only 50-60% of your base salary (often excluding bonuses and commissions). The benefits are usually taxable if the employer pays the premium. The policy is not portable—if you leave your job, you lose your coverage. The definition of disability can be very restrictive, often making it difficult to qualify for benefits.

Individual Disability Insurance (purchased on your own):

• Benefits: You own the policy, so it is completely portable and stays with you if you change jobs. The benefits are received tax-free because you pay the premium with after-tax dollars. The policy is highly customizable, allowing you to choose the benefit amount, benefit period, and add riders for enhanced protection. The definition of disability is often stronger and more favorable to you.

The Fargo Life Group Approach: We help you analyze your existing group coverage to identify potential gaps. For many professionals and primary breadwinners, a supplemental individual policy is necessary to fully protect their income and lifestyle.

Key Features of a Strong Disability Policy

When you work with Mark Wagner, we educate you on the critical components that define a quality policy:

1. Definition of Disability: This is the most important feature. A strong policy has an “Own-Occupation” definition, which means you are considered disabled if you cannot perform the main duties of your specific occupation, even if you could work in another field. A weaker “Any-Occupation” definition only pays if you cannot work in any job for which you are reasonably suited.
2. Benefit Period: This is how long you will receive monthly benefits while disabled. Options range from two years to until retirement age (e.g., 65, 67, or 70). We almost always recommend a policy that covers you until retirement.
3. Elimination Period (Waiting Period): This is the number of days you must be disabled before benefits begin. Common choices are 90 or 180 days. A longer elimination period results in a lower premium.
4. Benefit Amount: This is the monthly, tax-free income you will receive. It is typically calculated as a percentage of your gross income.
5. Important Riders (Optional Add-ons):
   • Residual or Partial Disability Rider: Pays a partial benefit if you can return to work part-time or in a reduced capacity with a loss of income.
   • Cost of Living Adjustment (COLA) Rider: Increases your monthly benefit each year to keep pace with inflation.
   • Future Increase Option (FIO) Rider: Allows you to purchase additional coverage in the future as your income grows, without having to go through medical underwriting again.

Your ability to earn an income is the foundation of your family’s security. Don’t leave it unprotected. Contact Fargo Life Group for a complimentary review of your disability insurance needs.