Imagine if you had a machine in your home that could produce all the money you ever needed. Would you want to make sure you knew who to call if that machine ever broke down? Would you insure that machine incase it could not produce money for you for a month, 2 months, 6 months, a year or longer? Well you do have a machine like that, its you.
If your current paycheck stopped due to you being ill or injured, how long would you be able to make your mortgage or rent payment, buy groceries or pay your credit card bills without feeling the pinch?
For most people it wouldn’t be long at all: 70% of working Americans couldn’t make it a month before they would have financial difficulties, and 25% would have problems immediately, according to a Life Happens survey ('What Do You Know About Disability Insurance' survey Life Happens 2018)
Disability insurance can help in this situation.
It will ensure that if you're unable to work because of illness or injury, you'll continue to receive an income and make ends meet until you can return to work.
You don’t hesitate to insure your home, car and other valuable possessions. Why wouldn’t you protect the thing that pays for your home, car, and other valuables?
You have a 30% chance of suffering a disability that keeps you out of work for 90 days or longer at some point during your working career. (The Real Risk of Disability in the United States, Milliman Inc., on behalf of the LIFE Foundation, May 2007)
Remember 90% of disabilities are caused by illnesses not accidents. (The Council for Disability Awareness, Long-Term Disability Claims Review, 2010)
All of us have personal expenses whether they be personal debt, such as a mortgage or credit card bills, food, utilities, etc. How would you maintain your standard of living if you were too ill or injured to work for an extended period of time? A disabling injury or illness will most likely lead to medical bills, modifications to your car or home or other unforeseen needs that will be expensive.
You should also look at the big picture. How much do you earn in a year and what would that be over a lifetime. A 25-year-old worker who makes $50,000 a year and suffers a permanent disability could lose $3.8 million in future earnings. (www.lifehappens.org)
For these reasons and more, anyone who works—whether they’re single, married, with children or without—should consider disability insurance.
Many people think that a serious accident, a stroke, cancer, or a heart attack would be the cause of most disabilities. How ever according to the Council for Disability Awareness (CDA) 28% of long-term disabilities are caused by musculoskeletal and connective tissue disorders (back problems, joint pain, and arthritis), 15% from cancer and neoplasma issues, and 10% from cardiovascular issues.
Over 10 million US citizens receive some sort of Social Security Disability Insurance according to the Social Security Administration. With 90% of new claims being caused by illness rather than accidents and only 5% of those are work related. (2011 Council for Disability Awareness Long Term Disability Claims Study)
The average long-term disability claim will last 31.2 months according to the GenRe Disability Factbook.
Disability insurance will require you to go through an underwriting process that will look at your occupation, income, net worth, medical history, and other areas determined by the insurance carrier. The insurance will usually cover up to 60% of your income and cost you about 1%-3% of your income. Even if you are not able to cover 100% of your income, 100% of something is far better than 100% of nothing.