By: Lorrie Ward | Category: Professional Services | Issue: June 2013
David Merriman by the shelf in his office that keeps his priorities front and center.
When you walk into David Merriman’s office and look directly to your right, you will see a mahogany colored shelf filled with memorabilia from David’s life and, most prominently, photos of his family. This shelf represents the things that are important to David and is directly visible from his desk, keeping him ever mindful of his priorities and the things he wants and needs to protect.
As a State Farm agent, David wants to help clients be mindful of their own priorities as well and “expect the unexpected” when they consider what types of insurance they need. One question he would encourage people to ask themselves is what would happen to their family if they were to become disabled. “Americans are aware that they need to insure their cars, homes, and other valuable possessions,” David notes. “But they often overlook insuring their most valuable asset – their income. That’s what short term disability insurance does.”
Disability insurance provides monthly payments to a person who has become unable to work as a result of sickness or injury, and is thought by many in the insurance and financial planning industry to be the most neglected line of insurance coverage. David points out that many people who are employed by companies or corporations with group benefits offer group disability to employees, but most self-employed people never give the matter a second thought. Statistically, this puts the aforementioned most valuable asset at great risk, since research from the Social Security Administration shows that one quarter of today’s 20-year-olds will become disabled before they retire.
“A lot of people believe that Social Security disability will cover them if they become disabled,” David says, noting many conversations he has had with clients who have tried to apply for Social Security disability benefits. “The process is so difficult – it can take one to two years to get approved, and that’s if you get approved. The definitions are very strict.”
David observes that people truly do love and care about their families when they consider insurance, but have not always given extensive thought to all of the possibilities of what could happen if something were to happen to the breadwinner. “One of the hardest things is getting people to understand the need to insure themselves – and this includes both life and disability insurance.”
To illustrate how much not protecting earning potential can cost a person, David uses the example of a 40-year-old who makes $50,000 a year and plans to retire at 67 years old. If that person dies or is disabled and unable to earn until retirement age, that translates to $1.35 million in lost income. While disability insurance does not completely cover all lost income, it will help to cover H.U.G., an acronym used by the insurance industry to refer to the basic essentials needed to live: house (rent), utilities (heat, electricity) and groceries (food on the table).
“With disability insurance, you are insuring your paycheck,” David points out. To visit with David about your insurance portfolio and how you would like to protect the things represented on your own shelf of photos and memorabilia, call (918) 342-3266 for an appointment.