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.

This is a question we hear quite often from our clients: Why do I need personal disability insurance? Won’t social security pay me disability benefits?

Unfortunately, most who apply for benefits do not receive them. On average, 65% of people filing claims do not receive any. For those who do receive benefits, the wait can be unbearable.

According to an article in USA Today the Social Security Administration faces a record ”and rapidly growing” backlog of appeals by people who claim they are too disabled to work. Through June, it had just over 745,000 cases pending, and the wait for a hearing averaged 17 months, also a record.
Claimants in some parts of the country must wait up to 31 months, according to the agency. “People have died waiting for a hearing,” Social Security Commissioner Michael Astrue says.

The agency says the backlog doubled in six years and could reach 1 million by 2010.

In another USA Today article, they report that of 2.5 million people who file disability claims annually, nearly two in three get denied initially. If they pursue a federal hearing, they join about 745,000 others whose appeals are backlogged. As of June, their average wait for a decision was 529 days. The lengthy waits lead to bankruptcies and foreclosures, drinking and drugs, depression and divorce, even suicide, according to claimants, their representatives and employees of the Social Security Administration.