For most people the ability to earn a living is their most important asset. Imagine you suddenly become sick or injured and are unable to work. How long would you be able to maintain your same standard of living without an income?
With the US savings rate at an all time low, few people, regardless of occupation or family situation have enough set aside to sustain them through an extended disability.
Getting injured or becoming sick is very stressful. Now think about not being able to work and the mounting pills of bills. This extreme stress will probably slower your recovery and cause some depression.
If you are already suffering from an accident or illness could you imagine worrying about putting food on the table or trying to keep the lights on? You could avoid all of the pain and undue stress with a Disability or income protection policy. The small premium you pay now could not compare to the benefits a disability policy can provide if you became disabled.
As Employment opportunity shrinks more people are becoming self employed. These self employed people loose the benefit of group coverage, sponsored by a company. Regardless of your current income bracket, income protection should be your 1st priority. Think about it, if you suddenly loose your ability to earn a living, more sooner then later you world probably go into “survival mode” and start to sell or worse loose the assess that you work so hard to obtain. You could drain your savings and retirement accounts but how long would that last? Could you get by on your spouse income- possibly, but if you are like most, your monthly bills depend on two incomes. You could depend on Social Security Disability Benefits-not necessarily; less then half of all disability applications are ever approved.
To get approved for Social Security Disability benefits, your disability has to be so severe that you are unable to do any work-not just your own or current occupation. If approved your benefits wouldn’t start for 5 months and your disability must be expected to for 12 months or results in death. Most Americans protect their home and vehicles but forget about protecting the most important thing “their income”! Without an income you will no longer be able to afford your home, vehicle and other basic elements of living.
When life is good it’s difficult to imagine being disable from an illness or accident. It’s time to face the facts, that a disability can happen at any time or any place to anyone.
Accidents and Illness will force 1 in 5 US employees to miss work for at least a year before they turn 65. A Howard University report reveals that 53% of all bankruptcies filed in 2007 were due to the inability to pay medical expenses. There can’t be financial security unless you first protect your income.
Ask yourself tough questions. How much income protection would you need if you could no longer work? More people get life insurance before disability. Did you know that you are 5 times more likely to become disabled during your working years then you are to die pre- maturely. An illness or accident will keep 1 in 5 workers out of work for a year sometime during their working careers (US Census Bureau December 1997) and 3 in 10 workers entering the workforce will become disable before they retire (Social Security Administration, Fact Sheet January 1999). Don’t fool yourself, there are many who are denied Social Security Disability benefits, even though they are unable to work. In the event that you are one of the fortunate, the waiting time is usually over a year before you are approved. Could you afford to maintain your standard of living without income for over a year?
Over 90% of disabling accidents are not work related. This means that you wouldn’t qualify for Workers Compensation Benefits. And for those of you who think Disability Insurance is for the older worker, 52% of workers receiving Social Security Benefits are under the age of 55 (Social Security 2007 Annual Statistical Report). If you were unable to work for an extended period, what sources of income would be available to you. How could you manage? You could drain your savings and there are some definitions that you should know before shopping for the right disability Insurance Policy.
The Policy Elimination Period – is the period of disability that must elapse before receiving disability payments. It’s similar to the deductible on your auto and home owner’s insurance policy. Example: Jim Smart has a disability policy with a 30 day elimination period. On April 1st Jim was having some chest pain and after much convincing from his wife, decided to go to his Dr. for a check up. Jim Dr. reassured Jim and his Wife that it wasn’t a heart attach, but he pulled a muscle and he would not be able to perform any of his normal duties at work. Jim would get his 1st disability check in 60 days (approx. May 31st or June 1st). Disability Payments are always paid after being disabled or at the end of a period of disability.
Own Occupation – means that the Insurance Company would consider your current occupation at the time of a disabling injury or sickness. Example: If you are a welder and your job requires you to be able to stand for long periods of time if you hurt your toe and your Dr. said that you could do other work but no prolonged standing, then you would still qualify for disability benefits if you had the Own Occupation Rider on our policy.
The Extended Care Option – This type of benefit is of critical need for individuals, who will face the lost of income or even the loss of a career to stay at home and tend to an ill family member. Provision would pay disability benefits to you in the event that your spouse or close relative was injured or sick and you had to take off work to take care of that person.
The Partial Benefit Provision – This Provision will still pay benefits when the insured is able to work, but in a limited capacity. This provision often pays benefits for an extended period of time if the disabled insured has a loss of time, duties or income regardless of the amount of income earned when returning to work or while the gingival continues to work.
Mental Health Coverage – According to Mental Health America (2003), clinical depression has become one of America’s most costly illnesses. Left untreated depression can cost more then $51 million in absenteeism from work.
At age 32 the chance of becoming disable for 90 days is 6.5 times greater than the chances of death. (Source: National Association of Insurance Commissions)
More then 51 million Americans – 18% of the population is disabled.
3 out of 10 of the people entering the workforce today will become disable before they retire. (Source: 2007 Social Security Administration)
70% of American workers in the private sector have no long- term disability protection. (2007 Social Security Administration)
$1004 is the average monthly benefit paid by Social Security Disability Insurance. (Source: 2008 Social Security Administration)
2.35 million People were injured in auto accidents in 2008. Care crashes are the leading cause of acquired disability in the United States. (Source: NHTSA Fatality Analysis Reporting System)
75% of disabilities are cause by an illness rather then an accident. (Source: Commissioners Disability Table)
According to a Harvard report, 62% of all personnel bankruptcies filed in 2007 were due to an inability to pay for medical expenses. (The American Journal of Medicine June 4th 2009)
The likelihood of being disabling for 3 months or more is greater than dieing in any given year. (Source: Society of Actuaries)
Accidents or illness will force 1 in 5 US employees to miss work for at least a year before they turn 65. (Source: Life and Health Insurance Foundation for Education, November 2005)
Every year 350,000 personal bankruptcies are attributed to unexpected illness or injury. (Source: Injury and Illness contributors to bankruptcy, Health Affairs 2005)