Why You Need Disability Income Insurance
What's your most valuable asset? Is it your house, car, or other material possession? Or is it that which makes all those possible? How much is your ability to earn an income really worth? Here are some helpful tools to help you find out.
Calculate Lifetime Earnings
Using the chart below, estimate your potential lifetime earnings. Find your age and present yearly income to locate your potential earnings by age 65. Without disability income (DI) insurance, if you become ill or injured all this potential income could be lost.
| Annual Income | |||
|---|---|---|---|
| Age | $25,000 | $50,000 | $75,000 |
| 20 | $1,125,000 | $2,250,000 | $3,375,000 |
| 25 | $1,000,000 | $2,000,000 | $3,000,000 |
| 30 | $875,000 | $1,750,000 | $2,625,000 |
| 35 | $750,000 | $1,500,000 | $2,250,000 |
| 40 | $625,000 | $1,250,000 | $1,875,000 |
| 45 | $500,000 | $1,000,000 | $1,500,000 |
| 50 | $375,000 | $750,000 | $1,125,000 |
| Sources of Income While Disabled | |||
|---|---|---|---|
| Individual Disability Income Insurance | Employer-Sponsored Group Disability Plan | Government and State Disability Programs1 | |
| Amount of benefit available | Based on current income and occupation class; can range from $500 to $16,000 per month. | Typically provides a fixed percentage of the employee's earned income, such as 50%, which is likely to fall short of the employee's real needs. | Ranges based on pre-disability income level and age. Provides a small benefit for family members up to the family's maximum benefit. You must have between 6 and 40 credit quarters to be eligible. |
| If I qualify for Social Security, will my benefits be reduced? |
|
Generally reduced by any funds received from a government-sponsored program. | Not applicable. |
| Tax status of benefits | Income tax free when employee pays the premium. | Taxable at ordinary income rates when employer pays the premium. | Taxable at ordinary income rates. |
| Period before payments begin | Variety of options available from 1 month to 24 months.3 | Dependent on employer selected plan; typically 0 to 7 days. | 5 month waiting period before eligible to apply for benefits. |
| Length of time benefits will be paid | Variety of options available from 6 months to age 65 or 70. | Dependent on employer selected plan; typically ranges from 6 months to age 65. | Disability benefits are paid until full retirement age is reached. At this time, Social Security Retirement benefits replace disability benefits. |
| Additional Optional Protection4 |
|
Employer-sponsored group plans do not usually provide additional benefits other than straight income protection. | Social Security does not provide additional benefits other than straight income protection and possible cost of living adjustments (based on current legislation). |
| Disability Income Insurance solutions from Thrivent Financial | Thrivent Financial Individual Disability Income Insurance | Not available through Thrivent Financial – may be available through your employer-sponsored benefit program. | Not applicable. |
Disability and Retirement
Without disability income insurance, becoming disabled or ill could diminish your retirement savings or stop your contributions altogether. Think about what could happen to your retirement savings if you were unable to work for two years.
| Scenario 1 | Scenario 2 | |
|---|---|---|
| Option ages Alternate options |
No disability income insurance | Disability income insurance |
| Annual income | $33,000 | $32,0435 |
| Percentage of income used to pay the premium | 0% | 2.9% |
| Tax-free monthly benefit when disabled | $0 | $2,000 |
| Total potential benefit | $0 | $1,263,389 |
When you're ready to explore your options, a Thrivent Financial representative can give you more information and help you choose a disability income insurance plan that works best for you.
Product features may not be available in all states and may vary by age and occupation class.
This contract has exclusions, limitations, reductions of benefits and terms under which the contract may be continued in force or discontinued. For costs and complete details of coverage, call (or write) your Thrivent Financial representative.
Contract forms: 12124, 12125 Series ID12124, ID12125
Rider forms: 12126, 12127, 12128, 12131, 12136
1 State Disability Programs available in California, Hawaii, New Jersey, New York and Rhode Island. Benefit amounts vary by state and may change annually.
2 In California, substitute benefits cease when government benefits begin.
3 24-month deductible period not available in all states.
4 Available for an additional premium amount.
5 The annual income for scenario 2 is the same as in scenario 1 but is reduced by the initial annual disability income insurance premium. Benefits assume total disability and are payable after a 90-day waiting period. The potential benefit includes an annual cost-of-living increase of 5%.
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200903724 09/09