Paragon Perspectives: Life and Disability Insurance: All the Basics you need to Know
Let’s be real: thinking about life and disability insurance isn’t exactly what we’d call a “party starter.” It’s not like you’re hanging out with friends, and someone yells, “Hey! Let’s talk about life insurance!” (Unless you’ve got some seriously interesting friends, in which case, please send me their contact info.)
But here’s the thing—life and disability insurance are pretty much the unsung heroes of your financial plan. They’re like the superheroes you don’t really think about until you need them. And believe me, you don’t want to be without them when life (literally) takes a turn.
What’s the Deal with Life Insurance?
Imagine you’re a superhero (stick with me here). You’ve got a cape, a shiny mask, and a special power—you’re the primary breadwinner in your family. You’re keeping the lights on, paying for little Timmy’s soccer practice, and keeping the Netflix subscription alive. All is good in the world—until bam, life throws you a curveball. Maybe you trip over your own feet (it happens) or something worse.
Now, the last thing you want is for your family to be scrambling to make ends meet. Enter life insurance, your trusty sidekick. It’s the safety net that ensures your loved ones won’t be eating ramen every night just because you’re no longer around. It’s a financial cushion for those who rely on your income, so your mortgage, bills, and future pizza nights are covered.
The Big Question: “What Happens to My Loved Ones If I’m Gone?”
Alright, we know life insurance sounds important, but let’s get real—do we actually know how much we need? You don’t want to leave your family with nothing, but you also don’t need a policy that covers a luxury yacht if you’re not rolling in that kind of dough.
A good rule of thumb is to get about 10-12 times your annual income. So, if you make $50,000 a year, think about $500,000 in coverage. Enough to keep the bills paid and prevent your spouse from selling everything on Facebook Marketplace (unless they want to, in which case—power to them).
Disability Insurance: Not Just for Superheroes With Capes
Okay, let’s talk about disability insurance. Disability insurance is more practical—it’s your backup plan for when life decides to throw an unexpected curveball (again). Let’s say you break your leg. Or maybe you develop a chronic illness that makes it tough to go into the office every day. What happens then? Without disability insurance, you could be left facing bills, rent, and a mortgage while you’re busy binge-watching Netflix to distract yourself from the pain.
Here’s where disability insurance swoops in. It can cover 60-70% of your income while you’re laid up. Not quite the same as a vacation on a tropical beach, but it’s better than wondering how you’re going to make it through the month. Think of it like having a financial cushion that makes sure you don’t have to sell your car just to buy groceries. And that’s a pretty solid backup plan if you ask me.
The Big Question: “What If I Can’t Work?”
Let’s get to the second big question: “What if I can’t work?” Well, good news—disability insurance is here to cover those what-ifs. It’s like a superhero cape, but for your wallet. For short-term stuff (like recovering from surgery), short-term disability kicks in and helps you stay afloat. For long-term stuff (like recovering from a major accident or illness), long-term disability insurance has your back for the long haul.
How Much Insurance Do You Really Need?
At this point, you’re probably thinking, “Okay, I get it. But how much insurance do I need?” Great question. It’s a bit like ordering pizza—do you want a personal pan or an extra-large with all the toppings? (Hint: The more dependents you have, the larger the slice you need.)
For life insurance, experts recommend about 10-12 times your annual income. For disability insurance, 60-70% of your pre-tax income is a good starting point. It’s enough to keep things running without forcing you to sell your prized possessions.
And here’s a pro tip: Your employer may offer some insurance coverage, but don’t just assume it’s enough. Double-check, and if necessary, supplement it with a little extra coverage. After all, we don’t buy one pizza and call it a “feast,” right? Same goes for insurance.
Conclusion: Don’t Wait Until You Need It
Okay, so maybe life and disability insurance won’t win you any “Most Exciting Topic” awards at your next dinner party. But here’s the thing—it’s not about worrying about the worst-case scenario. It’s about making sure that if life does throw a curveball, you’ve got a solid game plan in place.
Remember: Life insurance helps protect your family after you’re gone. Disability insurance makes sure you can still pay your bills if you can’t work. It’s like having an emergency fund, but with a bit more superhero flair. So, why wait? Start looking into your options, and make sure you’re covered. After all, the only thing worse than dealing with insurance is not dealing with it when you really need it.
Need help figuring out what type of life and disability insurance is best for you? Don’t worry! You can always reach out to our office 215.348.3176. Because let’s face it—insurance might not be fascinating, but it sure is smart.
About Charles
Charles McNamara, III (Charlie), is a Founding Partner, Financial Advisor, and President at Paragon Wealth Management, a financial services firm based in Doylestown, Pennsylvania, dedicated to professionally supporting, educating, and providing informed direction to each and every client. Charlie’s passion for working with clients one-on-one to find specialized solutions to pursue their financial goals drives the firm’s client-focused mission and continued success. He values the confidence clients have in him to always keep their best interests in mind.
A veteran of the financial services industry since 2000, Charlie brings an extraordinary level of knowledge and experience to the financial field. After obtaining a business finance degree from Delaware Valley University, he began his career as a financial advisor with Prudential Financial in 2001, and was promoted to management in only three years due to his hard work and dedication. With an entrepreneurial spirit and a passion for helping people solve problems, he launched his own practice in 2007.
When he’s not at work, Charlie spends time with his wife, Lisa (co-owner of local salon Moxie), daughter, Carissa, and their two dogs and cat. He enjoys weightlifting, running, golfing, fishing, and giving back to the community through his church, Our Lady of Mt. Carmel, and local organizations, such as the Travis Manion Foundation. To learn more about Charles, connect with him on LinkedIn.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Paragon Wealth Management and Great Valley Advisor Group are separate entities from LPL Financial.