It’s impossible to predict when an illness or injury might strike. While it’s true that you might never find yourself needing to utilize disability insurance benefits, it’s a fact that 30 percent of the workforce between the ages of 18 and 65 will experience a disability of 90 days or more prior to retirement. While it’s preferable to be in the 70 percent of workers that aren’t likely to experience a disability, there’s no way to know for sure what the future holds for you and your health.

Don’t Bet on Disability Insurance Statistics

When you review disability statistics, it’s important to look beyond the numbers and percentages. It’s true that certain factors contribute to how likely it is that a particular person will become disabled. However, it’s also a fact that accidents and illnesses can strike anyone at any time, without warning. It’s just not possible to predict with certainty who will become disabled, or when.

Assuming that you don’t need disability insurance because you feel that statistics are on your side is a gamble, no matter how you look at it. If you bet that you won’t become disabled and you’re wrong, the financial consequences could be devastating for you and your family. Disability insurance isn’t expensive compared to the potential benefits and it’s an important way to make sure you can continue to take care of you and your loved ones in the event of an unforeseen circumstance.

What to Expect From Disability Insurance

Have you ever thought about what might happen to your family if you were to become unable to work? When you have a good long term disability insurance policy in place, this isn’t something you’ll have to worry about. If you become unable to work due to a covered event, your disability insurance benefits will provide you with funds that you can use to take care of your ongoing living expenses.

Taking out a disability insurance policy is one of the best investments you can make in your family’s long term financial security. In the event of an unforeseen health problem, you need to be able to focus your time and energy on getting well, not on wondering where you’re going to get the money to pay your mortgage or power bill.

• The first necessity is that credit card debt should be paid off.   Cramer advises potential investors that carrying balances on high-interest credit cards can potentially cancel out any gains earned in the stock market.

• The second necessity is health insurance.  As medical emergencies are the largest cause of personal bankruptcies, Cramer says that acquiring health insurance is a must.

• Disability Insurance is the third necessity mentioned by Cramer.   As your ability to earn an income is most probably your greatest asset, losing your income would definitely impact your ability to invest in the stock market.

I’m glad to see that he includes disability insurance in this group, as this extremely important insurance is often overlooked by many financial advisors.   It makes sense to not only have health insurance, but to add coverage that will replace a portion of your income should you lose your ability to work, due to illness or injury.  If you can’t work, it would be very difficult to continue with any investment strategy.

If you would like to receive disability insurance quotes, click the Get Started button above and complete the short form.

• 44% of U.S. families spend more than they earn.
  Federal Reserve Board, Survey of  Consumer Finances, 2007

• Over 50% of us don’t have private pension coverage.
  Social Security Administration, Fact Sheet, January 2009

• One-third of us have no retirement savings.
  Social Security Administration, Fact Sheet, January 2009

• 60% of adult Americans have no savings for emergencies.
  Consumer Federation of America national survey by Opinion Research Corp, Feb. 2007

• 71% of Americans would find it very difficult or somewhat difficult to meet their current financial obligations if their next paycheck were delayed for one week.
  American Payroll Association, “Getting Paid in America” Survey, 2008

• 65% of working Americans say they could not cover normal living expenses even for a year if their employment income was lost; 38% could not pay their bills for more than 3 months.
  CDA proprietary research, March 2010

• 86% of working Americans believe that people should plan in their 20′s or 30′s in case an income limiting disability should occur;
  - Only 50% of all working Americans have actually planned for this possibility.
  - Fewer than half have even discussed disability planning.
  CDA 2009 Worker Disability Planning and Preparedness Study

It is apparent from this survey that most American workers’ incomes are not protected:

• About 100 million U.S. workers are without private disability insurance.
  Social Security Administration. Fact Sheet, January, 2009

• 69% of U.S. workers in the private sector have no long-term disability insurance.
  Social Security Administration. Fact Sheet, January, 2009
  

I speak with a lot of people about disability insurance and quite often hear “I can’t afford it” from prospective clients.   I always ask them, if you can’t afford to purchase disability insurance, how will you be able to afford a long term disability?  The statistics from this survey and other disability statistics on this website clearly display the need for this type of insurance.  By shifting other expenses around, I can often show my clients that they can afford this coverage and can’t afford to be without it.  To start, get some disability insurance quotes on this website.

Adults not only work to provide for themselves, but also to provide for their families. Imagine for a moment that a disability or illness kept you from your job. Many Americans work paycheck to paycheck and even those who don’t can ill-afford to lose their income. Individual disability insurance can protect your income in the event of an accident causing disability. The cost of coverage will increase as you get older, so putting off attaining individual disability insurance isn’t a wise decision. There is also the added pressured of not knowing when an accident could occur. The sooner you and your family are protected, the better.

Many people put off individual disability insurance if they are already part of a group policy. This may not be a wise decision. Individual disability insurance, in almost all cases, has much more comprehensive benefits than group policies. Also, most group disability insurance policies will not come with you, if your employment with your current employer terminates. Individual disability insurance is portable and will follow you, no matter where you work.  The benefits of most group disability insurance policies are reduced by other disability insurance benefits you might receive, even government benefits. Individual disability insurance benefits are never reduced  by other benefits you might receive.

Aside from the multiple benefits of improving your health, there are certain risk factors that increase the chances of becoming disabled during your working years.  Eliminating or decreasing those factors will not only decrease your chances of becoming disabled, it will make it easier for you to be approved for a disability insurance policy.

According to the Council for Disability Awareness (CDA), some of the factors that increase the risk of disability are:

• Tobacco use
• Excess Body weight
• High risk activities or behaviors
• Anxiety or Depression
• Chronic conditions such as diabetes, high blood pressure, substance abuse

Conversely, a sample of factors that decrease the risk of disability are:

• No tobacco use
• Maintaining a healthy body weight
• Not engaging in high risk activities or behavior
• Maintaining a healthy stress level
• Effective treatment of chronic diseases

If you want to calculate your chance of disability (Personal Disability Quotient), visit the CDA website at http://www.disabilitycanhappen.org/chances_disability/pdq.asp.  You’ll be glad you did.

According to the article, the disability insurance component of Social Security was created in 1956 to provide income support to individuals aged 50 to 64 who were permanently disabled.  However, as is typical with most government programs, eligibility and benefits have been expanded over the past 54 years.

The article, submitted by the Cato Institute, goes on to suggest that this program, originally designed to help seriously disabled individuals, has become a “gigantic budgetary burden that acts more like an unemployment program.”   The long-term upward trend in benefits suggests that many might very well be taking advantage of the system.

With so much attention on budget cuts, I wouldn’t be surprised if Congress takes a long hard look at the SSDI program and, at the least, make some cuts in benefits or make qualifying more difficult.

I never thought counting on Social Security for retirement was a very good idea.  I also have never liked the idea of relying on SSDI for disability benefits, if needed.  I am now more certain than ever that reliance on either is an invitation to financial disaster.

Protect yourself with a high-quality disability insurance policy and you won’t have to worry about what happens to this government-sponsored program,

Your answers to these questions will give you an indication as to how well you will financially survive a disability.  If you’re like most people in the workforce, at some point you should probably consider getting some individual disability insurance.  Even if you have a group plan at work, chances are you should supplement it with an individual plan.

Thanks to Mutual of Omaha, that has now changed.  They have recently introduced two options for individual short-term disability insurance:

• Short term disability insurance covering accidents and sickness;
• Accident-only short-term disability insurance.

Short-term disability insurance is a great product to purchase if:

• You want immediate coverage from your first day of disability (long-term policies typically have a 90-day elimination period in which no benefits are paid).
• You only need coverage until your employer-paid or individual disability policy begins paying benefits.
• You are willing to accept a shorter benefit period than offered in long-term policies in order to keep the premiums down.

I have felt the industry needed a product like this and I’m glad to see Mutual of Omaha stepping up to the plate and delivering this much-needed coverage.

In most cases, my clients ask me to challenge the underwriters’ decisions.  I will usually comply with their wishes, even though I know my efforts will often be futile.  Occasionally, with additional medical documentation, we can get the exclusion lifted or, at the least, assigned a temporary, rather than permanent status.

I always tell my clients that, because the underwriter can exclude their pre-existing condition from the policy, they are able to issue a disability policy for them.  Without the exclusion – no policy.  If I feel the underwriter is being “unfair” about he exclusion, I will sometimes check with other underwriters  to see if a “no-exclusion” policy might be available from their company (this is one of the benefits of working with a broker rather than an agent who is “captive” to one company).

I have had clients (of the “outraged” variety noted above) who have refused to accept a policy based on an exclusion.  I always point out how short-sighted this could be, as there are many possible diseases and other physical ailments that could potentially cause one to be unable to work.

In one case, my client refused a policy because the insurance company excluded his shoulder from the coverage, due to a recent (minor) shoulder injury.  Even though he knew his shoulder injury wouldn’t keep him out of work, he was willing to risk being without coverage for anything else that might prevent him from working.

If you should be offered a policy with an exclusion, contest it by all means.  However, if you don’t get the exclusion lifted, take the policy anyway.  You’ll still be covered for the majority of illnesses and/or conditions that might keep you from working.