Disability Insurance 101

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Sep 2020

Think about it. What would happen if suddenly, due to an illness or injury, you were unable to work?

Without your paycheck, how long would you be able to make your mortgage or rent payment, buy groceries or pay your credit card bills without feeling the pinch? If you’re like most, it wouldn’t be long at all:7 in 10 working Americans couldn’t make it a month before financial difficulties would set in,and one in four would have problems immediately, according to a Life Happens survey.

That’s where disability insurance comes in. Think of it as insurance for your paycheck. It ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work.

You don’t hesitate to insure your home, car and other valuable possessions, so why wouldn’t you also protect what pays for all those things—your paycheck

Explore this section to learn more about the different sources of disability income protection and ways to get coverage.

Who Needs It?

Simply put, if you have a job, you most likely need disability insurance. The possibility of a disabling illness or injury may seem remote, but statistics say otherwise.

You actually have a three in 10 chance of suffering a disability that keeps you out of work for 90 days or longer at some point during your working career. And keep in mind that 90% of disabilities are caused by illnesses not accidents.

Most of us have some kind of personal debt, such as a mortgage or credit card bills. Would you be able to maintain your standard of living if you were too ill or injured to work for an extended length of time? Plus, a disabling injury or illness could lead to medical bills, modifications to your car or home or other unforeseen needs that can be quite expensive.

You also have to think long term. How much do you earn in a year and what would that be over a lifetime.A 25-year-old worker who makes $50,000 a year and suffers a permanent disability could lose $3.8 million in future earnings.

For all these reasons, almost anyone who works—whether they’re single, married, with children or without—should consider disability insurance.

  1. The Real Risk of Disability in the United States, Milliman Inc., on behalf of the LIFE Foundation, May 2007
  2. The Council for Disability Awareness, Long-Term Disability Claims Review, 2010

What Do You Know About Disability Insurance” survey, Life Happens, 2018

https://lifehappens.org/insurance-overview/disability-insurance/

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