If I had a dollar for every potential disability insurance client I heard these words from, I would be a very wealthy man.  These words are further from the truth than you might believe.  Here are some sobering statistics:

• The Council for Disability Awareness** (CDA), an association of 16 insurance companies that comprise 75% of the commercial disability insurance marketplace, reports that 95% of all CDA Member Company disability claims are not work-related.  For the Social Security Administration, 90% of all disabilities are not work-related.

• 31.2% of individuals who received long-term disability benefits from CDA Member Companies in 2009 did not qualify for disability benefits from  Social Security.  While the number of workers receiving Social Security Benefits has increased, only 35% of workers applying for SSDI disability claim payments in 2009 were approved; 10 years ago, the approval rate for workers applying for disability was 52%.

• In spite of the limited protection afforded by Social Security and Workers’ Compensation, the US Bureau of Labor Statistics reported in an April 29, 2010 press release* that 46% of full-time workers had short-term disability benefits and only 39% had signed up for long-term disability.

The conclusion:  Many of the disabling incidents that could keep you from earning an income are not going to result in payments from either the SSA or Workers’ Compensation.  If you don’t have disability insurance, you should definitely look at acquiring it to protect your income.

*April 29, 2010 Press Release from Business Wire, “Mos Americans Live to Work But Don’t Prepare for Illness or Injury that could Put Their Income at Risk.

If you ask this question of your agent or broker and the answer isn’t “YOU,” find someone else to work with.  Yes, a reputable disability agent/broker should represent the major disability insurance companies, but, as your representative, he/she should be working toward your best interests.

I was recently competing with another agent for someone’s business.  I presented 5 different options for this person, while the other agent represented one company.  While the other company is an excellent insurance company and offers a decent disability insurance policy, the premiums, if offered with all the benefits the client should have, would have been significantly higher than four of my offerings.

The only way this agent could compete was to strip the policy of some very essential benefits, thereby reducing the premium to a somewhat competitive level.  The problem with this strategy was that he was now offering a significantly inferior policy and, if he wanted to make the sale, he would have to convince the client that some of the stripped benefits were not essental.

As an example, he removed the Non-Cancellable clause of the policy, which means that the insurance company could raise the premium or change the benefits or even cancel the policy in the future.  He justified this by saying that the client didn’t need this feature because the insurance company has never raised the premiums on these types of policies.   Even if this was true, every agent knows that past performance is no guarantee of future performance.  This is terrible advice given to a potential client only for the purpose of making the sale – not for the purpose of doing the best thing for the client.

So my suggestion, when interviewing a new agent or broker, is to ask them who they represent.  Now you know what the correct answer should be…”YOU.”

Fourth of July, a day to celebrate our independence, a day of fun with family and friends, can often be marred by accidents involving fireworks.  I suppose, because of my role as a disability insurance broker, I watch with horror as many folks mishandle fireworks on this day.

According to a 2009 report issued by the U.S. Consumer Product Safety Commission (CPSC) on non-occupational fireworks-related deaths and injuries:

• Fireworks were involved in an estimated 7,000 injuries treated in U.S. hospital emergency departments during calendar year 2008.  CPSC Staff estimated that there were 9,800 fireworks-related injuries during 2007.

• An estimated 5,000 fireworks-related injuries (or 70 percent of the total fireworks-related injuries) were treated in U.S. hospital emergency departments during the one-month special study between June 20, 2008 and July 20, 2008.  CPSC staff estimated that there were 6,300 fireworks-related injuries (66 percent of the annual total) during the 2007 special study period.

• Of the fireworks-related injuries sustained, 62 percent were males to and 38 percent were to females.

So, go out and eat all you want at the barbecue, have a few beers (but don’t drive afterward), play all the fun games in the park, but please, leave the fireworks to the professionals.

I have heard this phrase many times when broaching the subject of disability insurance with a client.  I always pull out a chart that shows the leading causes of disabilities.  My clients are always surprised to see that accidents are not at the top of the list of disability causes.  And, not surprisingly, the number of accident-related disabilities is dropping.

According to the 2010 CDA (Council for Disability Awareness) Long-Term Disability Claims Review, accident-related claims dropped rather significantly as a cause of new disability claims from 2008 to 2009.  This may be related to lifestyle changes, possibly driven by the economy.

Musculoskeletal/connective tissue disorders continue to rank as the leading cause of disability, according to the study.  This category includes claims caused by neck and back pain; joint, muscle and tendon disorders; foot, ankle and hand disorders; etc.

Cancer is the second leading cause of new claims but is the fourth leading cause of existing claims.

Cardiovascular/circulatory problems have increased slightly in 2009 as a cause of new claims after three years of declines, and are the third leading cause of new and existing disability claims.  Examples in this category include claims caused by heart and circulatory disorders, strokes, etc.

So, while you should protect your income from disabling accidents, there are other causes of disability you should be protected from.

In their recent survey of member companies, the Council for Disability Awareness (CDA) posted some interesting findings regarding the impact of the economic downturn on disability insurance.  Here are some of the findings from their survey:

• $8.1 billion in long-term disability insurance claim payments was paid to disabled individuals by CDA Member companies in 2009, representing a 2.9% increase over 2008.
• Impact of the economic downturn on disability claims:  Most reporting companies suggest they have observed little evidence that the recession has broadly impacted claims in any significant way.  Most companies report little change in claim incidence or termination rates.
• Impact of the economic downturn on insured lives:  Member companies have reported insured lives declined by 2.2% from 2008 to 2009, reflecting job losses and layoffs in the broader economy and 1.2% fewer employers providing group long-term disability programs in 2009.

• Impact of the economic downturn on worker psyche:  The economic downturn has had a prolonged effect on U.S. workers.  Swollen unemployment rolls and media coverage of out-of-work Americans has helped raise awareness of the importance of every worker’s income.  Wage earners are holding onto jobs if they can, and savings rates increased in 2009 to over 4% for the first time in over a decade.  A looming sense of economic vulnerability has elevated the importance of taking responsibility for planning for personal financial security. Eroded retirement accounts, continued economic volatility, news of home foreclosures and a stubbornly high unemployment rate have raised American workers’ awareness of financial risk and made planning for an income-limiting disability more important than ever.

• About 100 million workers have no private disability insurance.

I have to admit that I don’t get soccer.  I grew up on the East Coast of the U.S. and, when I was in school, soccer is “what all the other countries played.”  Now that I live on the West Coast, I am immersed in the melting pot of World Cup Fever.  In my gym, whenever I pass a TV, a game is being played and the score is usually 0-0 or 1-1.  When I come back a half hour later, there’s been no change.

Having just gone through the NBA post-season (with my Lakers winning the finals, thank you), I’m used to watching a much higher-scoring, higher-paced game.  I compare the few minutes of soccer I have watched with the last 10 minutes of game 7 against the Boston Celtics and I wonder how anyone can get excited about a soccer match, or game, or whatever you call it.

While watching, however, I kept wondering if any of these players have long-term disability insurance (no surprise there, since that’s what I do for a living).  Thankfully, there is some very specific disability insurance available for athletes.

The coverage is quite different than policies sold to “normal” occupations.  One of the benefits available to athletes that you wouldn’t find for an accountant, for instance, is a “Loss of Endorsements” benefit.  Another available benefit would cover agents and managers during the time of disability, should the athlete need to continue utilizing their services.

So, while I can’t get too excited about watching these low-scoring matches, I can get excited about working with these excellent athletes to ensure that their incomes are protected should they become  injured while not scoring.

My apologies to all you avid soccer fans who are enjoying the World Cup.  I’m sure there’s something you see that I don’t.  Maybe by next World Cup I’ll be converted, but only if they ban those darn Vuvuzelas from the stadium.  Don’t get me started on those!!

I have posted several times about the pitfalls of relying on our Social Security system for disability insurance.  I would like to tell you that it’s getting better, but I wouldn’t be telling the truth.

The recently-released 2010 CDA (Council for Disability Awareness) Long-Term Disability Claims Review suggests that, while applications for benefits rose 21.4% in 2009 from the previous year (also a record rise from 2007 levels), the SSDI claim approval rate continues to decline.

The SSDI percentage approval rate for applications has been trending downward since the late 90’s.  Only 35% of workers applying for SSDI disability claim payments in 2009 were approved; 10 years ago, the approval rate for workers applying for disability was 52%.

If those statistics don’t get you thinking about looking into a quality long term disability income policy, here are a few more – 56% of SSDI recipients received less than $1,000 monthly; 84% of SSDI recipients received less than $1,500 monthly (both figures from 2008).

The safety net is fraying all over.  If you depend on it to provide security for you and your family, I’m afraid you will only find disappointment at a time when you don’t need any more bad news.  Protect yourself and your family with a disability insurance policy from a top-rated company.  You’ll be a lot safer if you do.

This is the question I ask my clients when I suggest they consider a disability insurance policy.  As most Americans can’t truly afford the cost of  long term disability, I already know the answer to the question.  The cold hard reality is that most people who work for a living would suffer extreme financial hardship if they were to become disabled.  Here are a few facts that were recently compiled by Principal Life Insurance:

• In 2007, the median income of households that include any working-age people with disabilities in the U.S. was $38,400 (U.S. Census Bureau, American Community Survey, 2007).
• Over 70% of working Americans do not have enough savings to meet short-term emergencies (National Investment Watch Survey, A.G. Edwards, Inc., 2004).
• Over 50% of the workforce has no private pension coverage and a third have no retirement savings (Social Security Administration, Fact Sheet, 2007).
• 71% of American employees live from paycheck to paycheck (American Payroll Association, “Getting Paid in America” Survey, 2008).
• Only 40% of adult Americans have separate emergency savings funds (National survey commissioned by the Consumer Federation of America (CFA) and carried out by Opinion Research Corporation).
• More than 35% of workers with 401(k) or IRA plans have not though about or don’t know what would happen to their contributions if they were unable to earn an income for a period of time (Council for Disability Awareness, 2007 Disability Survey).

If you ask yourself the question, what would the answer be?  If, like most Americans, your answer is a resounding “Yes,” I would strongly recommend you look into disability insurance by getting some Disability Insurance Quotes.

In recognition of Disability Insurance Awareness Month, Principal Life Insurance published this list:

Myth #1:  I can rely on my savings.

Fact:  Even if you save 10% of your salary, one year of disability could easily wipe out many years of savings.

Myth #2:  Social Security Benefits will take care of me.

Fact:  Just 35% of the 2.8 million workers who applied for Social Security Disability Insurance benefits in 2009 were approved.

Myth #3:  A disability won’t happen to me.  I expect to stay healthy.

Fact:  Every 10 minutes, 490 Americans become disabled.

Myth #4:  I can rely on disability coverage through my employer.

Fact:  Group long-term disability insurance typically covers 60% of gross income, and benefits are usually taxable.  Can you afford more than a 40% pay cut?

Myth #5:  Individual disability insurance costs too much.

Fact:  The average annual cost is typically only 1% – 3% of what you earn.

Don’ t let the consequences of a disability derail your lifestyle and future plans. Purchase a long-term disability insurance policy now.

Okay, so I used a little poetic license in the title, which I borrowed from the Latin phrase, “Carpe Diem.”  DIAM stands for Disability Insurance Awareness Month, which will be “celebrated” once again in May.  Life and Health Insurance Foundation for Education (LIFE) does a great job every year of  reminding us how important disability insurance is for most Americans.

It’s interesting to note that the term “Carpe Diem,” which literally means “Seize the Day,” was originally used in a Latin poem by Horace.  However, what Horace actually used the term to mean was “enjoy, make use of.”   In the poem, Horace used the phrase as part of the longer “Carpe diem quam minime credula potero” – “Seize the day, trusting as little as possible in the future (Wikipedia).”

How appropriate then is the expression I used to celebrate  DIAM.  Enjoy the day, but as you trust as little as possible in the future, protect your future with a good disability insurance policy.  Educate yourself about how great the odds are of becoming disabled during your working years.  Protectyourincome.com is a great place to learn about this very important coverage, as is the DIAM information at the LIFE website www.lifehappens.org/diam.

Carpe DIAM!!!