Do I Need Disability Insurance?
If it were possible to know with certainty whether or not you’d experience a long term or permanent disability, the decision as to whether or not to take out a disability insurance policy would be an easy one. Since it’s not possible to predict the future with certainty, looking at disability statistics can be the best way to understand the likelihood of disability.
The Likelihood of Disability:
- Close to 30 percent of individuals between the ages of 35 and 65 will find themselves unable to work for 90 days or longer due to a disability.
- Nearly 15 percent of individuals between the ages of 35 and 65 are likely to experience a disability lasting five or more years.
- Adult men have a 43 percent chance of experiencing a disability.
- Adult women have a 54 percent chance of experiencing a disability.
- Individuals who are 42 years old are four times as likely to become disabled before reaching 65 years old than they are to die.
Startling Statistics on Disability and Foreclosure
Which is more likely to result in a foreclosure – disability or death? Even though more people invest in life insurance than in disability insurance, statistics indicate that disabilities are more likely to result in foreclosures than death. A 1998 study conducted by the Federal Housing and Home Finance Agency revealed that only three percent of foreclosures occurred as the result of a homeowner’s death, while 48 percent of foreclosures resulted from the disability of a homeowner. Understanding the Financial Impact of Disability
Have you thought about what might happen to you and your family if you became disabled and unable to work? No matter how careful you are about setting aside a portion of your income for emergencies, it’s difficult to comprehend what might happen to your financial situation if you were to experience a disability that rendered you unable to work. Following a disability, people have to cope with loss of income, the possible loss of health insurance and potentially very high medical bills. Here are a few disability statistics to illustrate this point:
Disability Statistics Related to Finance:
- Almost half of all home loan foreclosures result from loss of income resulting from a disability.
- Nearly fifty percent of all bankruptcy filings are associated with income lost following a disability.
- If you save ten percent of your salary each year, a single year of disability could wipe out ten years of savings.
Why Disability Insurance Matters
There are a number of reasons that disability insurance is an important investment. When you consider the consequences of what might happen if you don’t have disability insurance, it’s easy to see why disability insurance rates are a small price to pay for the protection afforded by this type of coverage.
Five Reasons to Protect Yourself with Disability Insurance:
- If you become unable to work due to a disabling illness or injury, you’ll have no source of income to cover the costs of daily living other than your savings.
- Nearly half of home loan foreclosures occur as the result of loss of income following a homeowner’s disability.
- Adults have a significantly greater chance of becoming disabled than of dying before reaching the age of 65.
- People between the ages of 35 and 65 have a one in seven chance of experiencing a disability that will last five or more years.
- Even if you’ve been diligent about building your savings account, experiencing a long term disability can wipe out years of savings in no time at all.
Be sure to investigate disability insurance ratings which will help you evaluate the financial strength of the insurance company backing the policy you choose.
Cancer and Disability Insurance Statistics
Cancer rates are on the rise, and more people are affected by the disease today than ever before. Fortunately, treatments for the disease are improving, which means that people who have the illness are living longer today than in years and decades past. This disease is a serious health problem that affects far too many people. Cancer is the number-one cause of long term disability in the U.S. While no one wants to be diagnosed with cancer, it’s a fact that a large percentage of the population will be affected by this disease at some point.
Disability insurance statistics indicate that a large percentage of long term disability insurance claims come from individuals whose lives and health conditions are affected by cancer. Cancer often renders people unable to work for extended periods of time, and statistics on the average disability insurance costs certainly indicate that the small cost of disability insurance premiums is well worth the benefits paid out during recovery from this disease. People who are living with cancer need to focus their energies on seeking treatment and healing, not worrying about where the money they need to pay the bills is going to come from.
Selecting Disability Insurance Coverage
When shopping for disability insurance, there are many important factors to consider. It’s important to make sure that you don’t select a policy solely based on price. Long term disability rates often vary significantly, based on a variety of factors. While at first glance disability policies with very different premiums may seem similar, there are likely to be important differences that become evident when you read the fine print.
What to Look For:
Disability Insurance Ratings: If you find one policy that is priced significantly lower than similar offerings, take a look at how the insurance companies’ financial ratings compare to each other. Make sure you choose a company with a strong rating, so you can be more comfortable with the strength of the company regarding any future claim.
Definition of Total Disability: Don’t assume that disability is defined in the same manner in every single policy. Make sure that the definition of disability isn’t so restrictive that you are less likely to collect benefits if you do experience a long term disability.
Length of Coverage: Make sure you pay attention to the maximum length of time benefits will be paid in the event that you experience a qualifying disability. Some policies provide payments only for a few years, while other provide protection to age 65 or even in some cases, for life.
Finding the Best Disability Insurance Rates
When shopping for the protection you need, it’s important to get a long term disability insurance rate comparison before making a decision. While you want to get a top notch policy, you certainly don’t want to pay more than necessary for the coverage you need.