Why You Need Disability Insurance


Becoming disabled, either because of a medical condition or injury, isn’t something you usually expect. Yet, more and more Americans find themselves in a situation where they are no longer able to work as a result of injury or illness.

Becoming disabled, either because of a medical condition or injury, isn’t something you usually expect. Yet, more and more Americans find themselves in a situation where they are no longer able to work as a result of injury or illness.

“The number of SSDI claimants has grown over the past decade as younger workers and those in relatively low-skill, low-pay jobs have applied for benefits,” reports Associate Commissioner of Compensation and Working Conditions Kristen Monaco in a February 2015 article in the Bureau of Labor Statistics’ publication, Beyond the Numbers.

Understanding the Importance

While many Americans opt to buy insurance policies to cover every asset, from their jewelry to their cars, not many think to cover what is arguably their most important asset: the ability to work and earn an income, reports a May 2013 article in USA Today by contributor Jeff Reeves.

Without coverage, lost wages can be far more detrimental to your life than the loss of your personal items. For example, if you make $50,000 in salary each year, 20 years of work (or of lost wages) equates to $1 million, says Reeves.

The Social Security Administration does offer some disability benefits, Reeves points out. However they are not typically sufficient to cover all living expenses without some other supplemental income. Furthermore, the eligibility process is complex, with benefits applying to only those who cannot work for at least 12 months due to a medical condition.

Having to wait an entire year for monetary benefits to surface, especially if you have children or other dependents to take care of, is not an ideal option. Bills and payments will not be put on hold, and you risk hurting your credit score and have assets repossessed if you do not have the money to pay your obligatory living expenses.

Instead, disability insurance is a better option that provides a more sufficient source of income should a disease or injury render you disabled and unable to continue working.

“The lowest paid occupational group—service workers—is also the group least likely to be covered by employer provided short- or long-term disability plans. Low paid workers are also the group most likely to apply for Social Security disability insurance (SSDI), which has led to financial problems for the program,” Monaco reports.

With a government system overloaded with claimants and benefits that are consequently spread thin, taking a private disability insurance policy can truly make the difference between maintaining your lifestyle and having to file for bankruptcy.

“The important take-away is that we all have a disability risk that is too high to ignore, whether 5 percent or 50 percent. The potential loss of income is usually in the millions of dollars considering one’s career earnings potential,” reports Barry Lundquist, President of the Council for Disability Awareness, in an October 2012 article in the New York Times.

The question thus becomes the following: can you afford and maintain your lifestyle while covering additional medical expenses and otherwise that come about from the disability?  If the answer is no, then you need disability insurance.

 

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One Response to “Why You Need Disability Insurance”

  1. I like how you said that disability insurance can provide sufficient source of income should a disease or injury render you disabled. My dad had an accident at his job and is injured and unable to work. Thank you for the tips on why you need disability insurance.

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