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Do You Need Disability Insurance?

Do You Need Disability Insurance?

There are misconceptions about all types of insurance, but the most misunderstood is probably disability insurance. Insurance consumers may believe that only those that are disabled need disability coverage.

However, like most other insurance, it cannot be purchased after a disabling event has occurred. It also cannot be purchased by those who are already disabled, unless it is being purchased in the event of other specified disabilities.

Here are a few reasons why you should purchase disability insurance.

Your Employer-Provided Coverage Won’t Last Forever

So your employer offers short term and/or long term disability insurance as part of your benefits package. This insurance may come at little or no cost to you.  Now what happens when you leave your job?

The Bureau of Labor Statistics reported in 2015 that the average person has 11.7 jobs between the ages of 18 and 48, with over half of those between the ages of 18 and 24. Between ages 40 and 48, 32% of jobs ended in less than a year and 69% in less than 5 years.

The disability benefit you receive from Employer 1 doesn’t carry over to Employer 2. While Employer 2 may provide disability benefits as well, you can’t take that coverage with you either. And what about Employer 3? Does he even provide it? Maybe not.

If you’re going to pay in to a disability policy, it should be one that stays with you no matter your employer. You control the limits, you control the portability and you benefit if you become disabled.

You Could Become Disabled

The chances of becoming disabled increase with age and infirmity, but they also increase with the level of danger included with your job. Construction workers are more likely to become disabled than office workers, for instance.

The Council for Disability Awareness has some interesting statistics: more than 25% of today’s 20 year olds will become disabled (either temporarily or completely) before they reach retirement age. In December of 2012, nearly 2.5 million Americans aged 20-50 were receiving disability benefits.

Young, healthy Americans may believe that their chance of disability is low, but there are many factors that can increase the likelihood of disability: being overweight, smoking, risky activities, infrequent sleep, drug and alcohol use. You may also become disabled engaging in ordinary activities such as driving, boating, swimming or sports or hobbies.

Would Your Financial Health Be Affected?

Many believe that even if they become disabled, they would be ok collecting Social Security Disability Insurance (SSDI). However, the average monthly SSDI income for males is $1,256 and for females is $993. Could you survive on that amount?

Only 5% of disabilities occur at work, meaning that 95% of disabling events are not covered by Workers Compensation insurance. In addition, 65% of SSDI claims are denied at first application, which means an appeal must be filed, further delaying benefits. How long could your family survive without your paycheck?

48% of US families don’t have a savings account, and over 65% of Americans don’t have an earmarked emergency fund. Those numbers are higher for younger sectors of the population.

It just doesn’t pay to be without private disability insurance. Contact your Hayes Broker today to find out more about disability coverage and how it can help your family.

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