Long-Term Disability | Are the Odds against You?
It’s surprising to find that most workers, professional or blue-collar, believe long-term disability is something that happens only to workers who have blue-collar jobs like roofers, heavy equipment operators, or people who do heavy lifting all day. Yet these are the same people who rush out and buy life insurance, car insurance, and homeowners insurance.
First, let’s not assume that disabilities are always the result of an accident. That is just simply not true. In fact, according to the Council for Disability Awareness, only about ten percent of long-term disability cases are the result of an accident on the job. The majority of disability income claims are actually the result of an illness like heart disease, cancer, or stroke.
These statistics certainly beg the question, “if most disability claims are illness related, then shouldn’t health insurance be the most important insurance to purchase?” While having comprehensive medical insurance is critical for having your healthcare expenses covered, it doesn’t cover you for lost income while you are fighting a debilitating illness. To protect your income, only disability insurance will foot the bill.
Let’s Talk Statistics
With the world at your fingertips (your keyboard), you can easily find answers to questions that have anything to do with anything. Consider a few tidbits regarding long-term disability claims:
- In today’s economy, approximately 65% of all working Americans couldn’t pay their basic living expenses for a year if they were to lose their income because of a disability. In fact, 38 percent couldn’t cover basic living expenses for only three months.
- According to LIMRA, a global insurance research firm, one in four U.S. workers entering the workforce will experience disability before they retire. And the worst part is that their disability claim will last just shy of three years!
- The Social Security Administration is reporting that about 37 million workers are disabled and about half of them are between 18 and 64-years old. They should be working and earning but they can’t because they’re disabled.
What about Social Security Disability?
Yes, if you are eligible, you can collect Social Security (SSDI) benefits if you are disabled and unable to work. But, and this is important, you must be unable to perform any work – not what you normally do, but anything you can do.
For readers who may be new to the subject of long-term disability, own-occupation is not the same as any occupation. This means if you are a surgeon who has become disabled, your government is unlikely to help you if you can still teach surgery rather than perform surgery.
There is also that little problem about getting your case reviewed and then approved. According to NOLO, a well-known legal research organization, less than half of all SSDI cases are approved on the first submission. This means that you can apply for your benefit, wait three months to get an answer, and 50% of the time, that answer will be “Denied.” Time to find an SSDI attorney!
Get Familiar with Chapter 7
For workers without any type of disability income insurance, the process after they become disabled is sadly familiar.
- File your claim with the Social Security Administration and wait about 90 days for approval.
- Use whatever savings you have for monthly living expenses.
- You receive your denial notice from Social Security and start looking for a lawyer
- Your attorney re-files your disability claim with SSDI.
- Max out all credit cards once your savings are gone.
- Cut off cable TV and internet and sell your boat or one of the family vehicles
- Your claim is finally paid retroactively and the lawyer get’s their share.
- File Chapter 7 bankruptcy and start over
It doesn’t always happen this way, there are many people who can get through the financial devastation that can result from a long-term disability, especially if a spouse is working. Unfortunately such is not often the case. In fact, a study done at Harvard University indicates that 62% of personal bankruptcies are the result of medical expenses and 78% of those cases had health insurance. Health insurance will not replace your income.
Enough Bad News – What’s the Good News?
The good news is that individual Long-Term Disability insurance is an affordable life-line for people who become disabled and cannot work. And the better news is you can purchase disability insurance that has an own-occupation definition. This means that no matter if you are a luxury car mechanic or a heart surgeon, your disability insurance benefits are triggered when you cannot perform your “own occupation” not “any occupation.”
Your long-term disability insurance is a legal contract between you and the insurer and is seldom settled in a courtroom. Your monthly disability benefit begins the moment your selected waiting period is exhausted and you won’t need an attorney to help you file your claim.
Where to find a Long-Term Disability Insurance Expert
There are many experts on the subject of long-term disability insurance. Who you choose becomes your advocate in the shopping, purchasing, and underwriting process. Make sure you choose an independent disability income insurance broker with the experience needed to help you make the best decision possible.
ProtectYourIncome.com powered by Intramark Insurance Services is an experienced and reputable independent disability insurance broker that represents all of the highly-rated insurance carriers and can deliver Long-Term Disability Income Insurance that will meet your needs and fit within your budget.