Disability insurance law is what we practice, but we also advise people that they should have disability insurance, the type that is offered through your employer and if appropriate, private or individual disability insurance to maintain your standard of living.
The ability to earn an income is one of most people’s biggest assets. We don’t think twice about buying insurance to protect our home or our cars. Most people do have life insurance, so that if they die, their family will have some means of income. But disability insurance isn’t something people like to think about.
Having a disability insurance plan in place could mean the difference between being able to continue to own a home, allow children to attend college and maintain a lifestyle that you’ve worked hard to attain.
Many Americans get their short and long-term disability insurance coverage through their employers. There are those who chose not to get disability insurance, thinking that the cost is not worth the deduction from their paychecks. More than 40 percent of full-time workers don’t have short- or long-term disability protection.
Why is this such a problem? The statistics are very clear: lacking disability insurance is a major financial risk for American families.
• At least 51 million working Americans do not have any disability insurance from their employer or their own policies.
• Less than half of all Americans have enough savings to cover the cost of three months of living expenses if they should become unable to work due to illness or injury.
• More than one in four of today’s working 20 year olds will experience a disability between now and their retirement, according to the Social Security Administration’s Actuarial Note. An illness or accident will keep 1 in 5 workers out of work for at least a year before the age of 65 – Life and Health Insurance Foundation for Education, November 2005
• One in 7 workers can expect to be disabled for five years or more before retirement.
– “Commissioners Disability Table, 1998,” Health Insurance Association of America, The New York Times, February 2000
Many people erroneously believe that they will have coverage through Worker’s Compensation or Social Security if they become disabled and they cannot work. But Worker’s Compensation only covers time away from work if the illness or injury was directly work related.
Social Security is difficult to obtain, with only a third of claimants getting their applications approved from 2006 to 2015. (We do not represent Social Security Disability claimants).
What would your plan be, if you could not work because of illness or an injury?
Short-term disability, depending upon the policy, replaces a predetermined percentage of your income. Usually it covers 50-60%, and only for a short period of time.
Long-term disability insurance replaces part of your income for longer periods of time, if you suffer an injury or an illness that prevents you from working. In some cases, a worker must first qualify for short-term disability before they can be considered for long-term disability benefits. Most long-term policies include a fairly long “elimination period” or waiting period between the time that a person stops working and can start collecting benefits. This is why every household should have an emergency fund to cover their costs before benefits begin.
How likely are you to become disabled? Disability is more common than most people think. You are three and a half time more likely to be injured and need disability coverage than you are to die. And the idea that disability only happens to older people is a myth. The odds of having a long-term disability before age 65 are one in three at age 30, three in ten at age 40 and five out of twenty-two at age 50.
Disability is one of the major reasons that homes are lost to foreclosure. Only 3% of mortgage foreclosures are caused by the death of the owner. Almost half (48%) are caused by disability.
If you have disability insurance and your claim is being denied, contact us at 1-877-LTD-CLAIM (1-877-583-2524).
If you don’t have disability insurance, we encourage you to look at the statistics and consider how an illness or injury would impact you and your family.