Disability Insurance: Why It’s A Must-Have for Working Americans

Many Americans are living paycheck to paycheck. Even people with savings typically cannot go for long periods of time without an income, especially if they have major medical bills to pay in the meantime. Unfortunately, an unexpected injury or illness can lead to exactly this scenario. If you depend on your paycheck, you need disability insurance.

Disability Is More Likely Than You Think

If you’re currently in good health, you may think that you’re unlikely to experience a disability during your working years. This is a dangerous assumption. According to the Social Security Administration, more than one out of four of today’s 20-year-olds will become disabled before reaching retirement age.

A disability can stem from many issues, including the following:

Musculoskeletal disorders

Illnesses, such as cancer and heart disease

Accidents and injuries

Pregnancy complications

The Financial Consequences Can Be Devastating

When people suffer a disability, their finances take two hits. First, they lose a paycheck. Second, they accumulate medical bills.

Even with health insurance, the average copays and deductibles mean that most people end up paying a significant amount out of pocket when faced with a serious illness or disease. These bills are often more than people can afford – and the debt collectors come calling. In an analysis of third-party debt collections, the Consumer Financial Protection Bureau found that medical debt accounted for 58 percent of third-party collections tradelines.

The loss of income combined with medical bills is too much for many people. As a result, they may have to make sacrifices – sacrifices like their retirement savings, their children’s college fund, their mortgage, and their lifestyle.

Social Security May Not Protect You

Many people assume that they can depend on Social Security Disability if they ever become unable to work due to injury or illness. The truth is that getting approved is much more difficult that most people realize.

Between 2007 and 2016, only 33 percent of Social Security Disability claims were approved. Some of these claims were initially denied but late approved on appeal, a process that can stretch on for many months.

Even if you get approved, the disability payments you receive from Social Security may not be enough. In early 2019, the average monthly check was only $1,234. That’s barely enough to keep the recipient above the 2018 poverty level. Just think about it. Would you be able to survive on $1,234 a month?

And if you’re thinking that workers’ compensation will protect you, don’t be so sure about that, either. Workers’ compensation only pays out if your injury or illnesses is connected to your job, meaning that many disabilities aren’t covered.

Disability Insurance Can Help

The situation isn’t all doom and gloom. Yes, disabilities are surprisingly common and can strike anyone. Yes, the financial consequences can be devastating, and many people cannot rely on Social Security or workers’ compensation. However, there is a solution: disability insurance.

Working Americans depend on their paychecks. Their families depend on this income, too. By buying disability insurance while you’re still healthy, you’re protecting your income and securing your financial future. Request a disability insurance quote today!

  • https://www.ssa.gov/disabilityfacts/facts.html

  • https://files.consumerfinance.gov/f/documents/201907_cfpb_third-party-debt-collections_report.pdf

  • https://www.ssa.gov/policy/docs/statcomps/di_asr/2017/di_asr17.pdf