1 U NDERSTANDING THE NEED FOR INCOME PROTECTION C USTOMIZED F INANCIAL S OLUTIONS P ERSON BY P ERSON.
2 What is your greatest asset: Your home? Business? Investments? They re all vital to your lifestyle, and they re all the result of your most valuable asset your ability to earn an income. If you were disabled, what would happen to everything you ve worked so hard to build for yourself, your family, and your future? For use with policy form numbers: UC 4401, UC 4402 and UC 4403
3 IT WON T HAPPEN TO ME. You probably think of a disability as something that happens to other people. But simply believing it won t happen to me doesn t mean at some time in your life you won t be faced with a disabling illness or injury. In fact, in any given year, one in eight persons suffers a disability* and they also thought it wouldn t happen to them. A disability can occur as easily as a misstep on a flight of stairs, or as suddenly as an oncoming car swerving out of control. It can take shape slowly, beginning as nothing more than an ache in your back or a pain in your chest. No one expects to become disabled, but you can take steps to make sure that if you should be robbed of your ability to work, you and your family will remain financially secure. P ROTECTING YOUR GREATEST ASSET. One of the rewards of productive work is the ability to increase your personal assets and plan for the future. All of your plans are based on two factors that are usually taken for granted: good health and a steady income. Your plans may include a new car, a new home, a college education for your children, and a comfortable retirement for yourself and your loved ones. Naturally, you assume you ll be physically and financially able to make those plans a reality. But, if you were to become disabled, you could lose everything you own as well as your dreams for the future. Are you willing to take that risk? * 1985 Commissioner s Disability Table After the auto accident, I had extensive surgery and couldn t work for 18 months. I don t know what I would have done without a disability insurance plan. I received benefits of $5,300 per month almost $80,000* during my recovery period. Sharon L., age 41 President and CEO of a computer software marketing firm *90 day waiting period The client profiles in this brochure are composites of typical situations. Photographs are representational.
4 A RISK YOU LIVE WITH EVERY DAY. The chances of becoming disabled are rising. Growing numbers of women and men between the ages of 45 and 65 are affected by hypertension, heart disease, stroke, and diabetes the four leading chronic killers. * Yet these people are living longer, primarily because of greater awareness of warning signs, improved methods of diagnosis and treatment, and increased use of health care services. Although the immediate risk of death from diseases such as these may be reduced, the chance of chronic disability may actually be increased. After months of non-stop working, I took some time off to go skiing. The first day out, I fell and shattered my right shoulder. It took six months before I could return to work. The good news is that my disability overhead expense plan paid my office lease and my assistant s salary so I could concentrate on getting well instead of worrying about what would happen to my business. C OULD YOU AFFORD A DISABILITY? A disabling injury or illness creates several layers of losses. The disability itself is either a temporary or permanent loss of good health, compounded by the loss of income. To make matters worse, expenses usually increase during a period of disability the result of health care costs not covered by insurance. These expenses may include treatment by physicians and other health care professionals, prescription medicines, home health care, and rehabilitation therapy. Would you be able to afford a disability? L OOK AT THE NUMBERS. Everyone s financial situation is different. You re the only one who can determine whether your family would be provided for if you were unable to earn an income. Take a few minutes now to compare your current expenses to the benefits you would receive. * Source: Lois Verbrugge, Longer Life but Worsening Health: Trends in Health and Mortality of Middle-Aged and Older Person, Health and Society, 66. (1984) 490. Jeffrey J., age 34 Architect
5 The Union Central Life Insurance Company Individual Financial Needs Analysis Expenses 1. Rent/Mortgage $ 2. Food $ 3. Utilities (water, heat, electricity, telephone) $ 4. Transportation (car payments, maintenance, repairs, insurance, gasoline) $ 5. Installment payments (credit cards, loans) $ 6. Insurance Premiums (life, health, car, medical) $ 7. Miscellaneous $ Total Monthly Expenses $ Monthly Amount Monthly For How Waiting Income Amount Long? Period 1. Current disability benefits (group, individual, association) $ 2. Other benefits (Social Security, Worker s Compensation, veteran s compensation, etc.) $ 3. Other income sources (stocks, bonds, spouse s income) $ Total Monthly Income $ If you are a business owner, would your disability disable your business? Add up your monthly expenses and deduct the benefits you would receive from other sources. The bottom line is that your monthly income would need to cover your net business expenses. Can you imagine being unable to work for five years? I couldn t, until it happened to me. It all started with a lumbosacral sprain, and then it was one surgery after another. But through the whole painful ordeal, my disability insurance plan paid me $3,900 a month, every month. Without those benefits, we would have had to give up our home. Roger S., age 40 Salesman Business Financial Needs Analysis 1. Utilities (heat, water, electric, telephone) $ 2. Employees wages, including payroll taxes $ 3. Property and liability insurance $ 4. Rent, scheduled mortgage payments, or if greater, depreciation for tax purposes $ 5. Taxes on owned business property used in your daily business operation $ 6. Lease payments, scheduled payments, or if greater, scheduled depreciation for equipment $ 7. Accounting, billing, and collection service fees $ 8. Interest payments on business debts $ 9. Laundry and maintenance services $ 10. Other normal and fixed charges acceptable as a tax-deductible business overhead expense by the Internal Revenue Service $ Total Monthly Business Expenses $ Disability Overhead Expense Coverage in Force $ Net Monthly Business Expenses $
6 W HERE WOULD YOU TURN FOR HELP? Now that you ve determined how much income you would need if you should become disabled, the question is: Where would the money come from? Resources Social Security Savings account Employee group disability Individual Retirement Account (IRA) Drawbacks and limitations Approximately 50% of all Social Security disability claims are denied.* How far would your savings go? And are you willing to see them disappear? Most plans cover only base pay. Benefits are taxable. A penalty is imposed for early withdrawal from an IRA. If you should withdraw these savings, what would happen to your retirement? I don t remember the accident. All I remember is waking up in the hospital, paralyzed from the waist down. It s been tough for the whole family. With all these medical bills and my not being able to work, we can t put our son through college and we can forget about retirement plans. With my life insurance coverage, I figured if anything happened to me, the family would be fine. I never thought about protecting my income in case of a disability, but I sure wish I had. Worker s Compensation Loan from a bank or other Friends and relatives Spouse s income Pays only a limited amount over a relatively short period of time. Who will lend funds to you, if you can t work? How will you pay it back if you remain disabled? May be willing to help, but their resources are limited. Can your spouse continue to work while caring for you and managing the household? A disability can be partial or total, temporary or permanent. Fortunately, most disabilities are temporary. But, even if you were disabled for six months to two years, consider how the loss of income would affect your financial security and retirement plans. You work to provide a continuous income, whether you re the sole breadwinner or one who shares this responsibility. If you lost your earning power as the result of a disabling illness or injury, a disability insurance plan would ensure continuity of income when you need it most. For you and your family, it could mean the difference between financial distress and financial stability. Don M., age 45 Self-employed manufacturer s representative * Source: Wall Street Journal, July 1992.
7 A PLAN THAT GOES TO WORK WHEN YOU CAN T. You can t eliminate the risk of a disability. But you can alleviate the concern. A disability insurance plan provides you and your family with a measure of protection against an illness or accident that could jeopardize your income. It s a plan that can make all the difference unless you wait until it s too late.
8 Insurance and Investments Securities products are offered through Carillon Investments, Inc., P.O. Box Cincinnati, Ohio ; a subsidiary of The Union Central Life Insurance Company, (513) UC The Union Central Life Insurance Company Customized Financial Solutions Person by Person. is a trademark of The Union Central Life Insurance Company, Cincinnati, Ohio.