The Road to Bankruptcy

NUMEROLOGY

o you and your clients have enough disability insurance? Most people buy insurance to protect their lives, their homes and their cars, but too many put disability insurance at the bottom of the list.

A study of bankruptcy filings by Harvard University revealed that medical disability led to nearly half of the 1.458 million bankruptcy filings in 2001. According to Harvard Law School professor Elizabeth Warren, a good education, decent job and health insurance are “no guarantee a person won’t be wiped out by an illness or accident.”

The 2005 Harvard research parallels the findings of an earlier Housing and Home Finance Agency study that found 48% of home foreclosures were the result of disability while only 3% resulted from the homeowner’s death. Combine that with the fact that one out of seven people who are between the ages of 35 and 65 can expect to become disabled for five years or longer and disability insurance becomes just as important as any other coverage. CPAs who are self-employed are particularly at risk, since there may be nobody to carry on their practice if they become disabled.