Disability Insurance Myths and Facts
Disability insurance can protect your income in the event you can't work. Several common myths about disability insurance lead many people to ignore the need for this critical coverage.
Myth #1:
I'm not going to get hurt or sick...this really isn't necessary.
Facts:
During your career, you are 3 1/2 times more likely to be unable to work due to injury or illness than you are to die.
Source: Health Industry Association of America, 2000
In the last 10 minutes, 390 Americans became disabled.
Source:National Safety Council, 2001
A fatal injury occurs every five minutes in the U.S. A disabling injury or illness occurs every 1.5 seconds.
Source: National Safety Council, Injury Facts, 2003 Edition
Motor vehicle crashes cause a fatality every 12 minutes, and a disabling injury every 14 seconds.
Source: National Safety Council, Injury Facts, 2003 Edition
more stats & facts...
Myth #2:
Government disability will cover me if I ever can't work.
Facts:
According to the Social Security Handbook, you will not be classified as "disabled" or entitled to benefits unless each of the following conditions is met:
- You are unable to engage in any substantial gainful activity because of a physical or mental impairment. You must not only be unable to do your previous work, but also any other type of work considering your age, education, and work experience.
Note: It does not matter whether such work exists in your immediate area, whether a specific job vacancy exists, or whether you would be hired if you applied for work. - Your impairment(s) must be established by objective medical evidence.
- It is expected that your impairment(s) will either result in death or last for at least 12 months in a row.
- You must meet the non-medical criteria needed to be insured by the program.
Even if your claim gets approved (good luck with that!), expect a six-month waiting period before benefits start! Even then, the monthly checks will be a small percentage of your regular income.
Myth #3:
I already have disability coverage through work that covers me if I can't work.
Facts:
Group disability insurance through your employer is a start...that's all.
For one, all benefits paid through your employer's insurance are taxable as regular income. In addition, such policies are typically riddled with exclusions and exceptions that keep the insurance company and your employer in total control during and after your disability. more...
Myth #4:
I can always get disability insurance later.
Facts:
In short, you should shop disability insurance as soon as possible when you are employed and completely healthy to get the best coverage for the smallest premium.
Your eligibility and cost for disability insurance are based, in large part, on your employment, age, and health.
- If not currently employed, you don't qualify for disability insurance.
- The older you are when applying, the higher your premium.
- The more health problems you currently or previously had, the higher your premium.
- Significant health problems can cause you to become ineligible for disability insurance altogether.
Myth #5:
I have other options if I become ill or injured and can't work.
Facts:
This is the most common mistake made, especially among business owners with solid savings accounts. A few points to keep in mind:
- It can take over a year to re-develop your client list after you've been out for just 6 months or more.
- Maybe you have substantial savings to delve into, but do you really want to? Do you really want to drain your savings, sell assets, and/or take out a mortgage on your home while you can't work?
- Banks are highly unlikely to grant loans to people that aren't able to work.
- You could possibly borrow money from family and/or friend, but do you really want to?
The alternative is an affordable disability income insurance policy that protects your assets and lets you and your family live your life as you always have.
For additional information, please submit the form on the right to be contacted by an authorized agent. .
*Source: Project Hope