|
 |
Wayne
and Betsy
In
1987, Wayne and Betsy came to me to review their financial planning
needs. During the course of
the meetings that we held, it was determined that Betsy's income, which
was $3,000 per month, was the main funding source for their mortgage
payments. Wayne's income
was used to cover the other family expenses and education for their
child.
I
recommended to Wayne, that since his company provided disability
coverage for him, there was no need for a disability policy for him
personally. In the case of
Betsy, I recommended a disability policy that would protect her income
should she become disabled. At
that time, Betsy was 43 and Wayne 58.
Betsy
and Wayne were reluctant to make an investment of approximately $2,000
per year for the coverage. Ultimately they did, although Wayne thought
it was a poor investment.
Nine
months after they took out the policy, Betsy was rear-ended in a car
accident and seriously injured. Her ability to sit at a desk, type, do paperwork, or do any
type of office work was destroyed, and she was totally and permanently
disabled. At age 43, she
had no income (Federal and state disability benefits ran out in less
than one year.)
However,
after a 30-day waiting period, her new disability policy began to pay
benefits. She received, and
continues to receive, $1,800 per month, completely tax-free, since the
policy was purchased from the couple’s personal income.
She will receive that income until age 65, when she will then
have her IRA accounts and Social Security.
The total amount of benefits she will receive will be about
$500,000 over the years from age 43 to age 65.
|
