If you were unable to work due to an accident or illness, could you continue to pay your bills and care for your family? Disability income protection is designed to replace a portion of your income should illness or injury prevent you from earning a living. While rates vary between policies and insurance providers, disability-income protection is intended to supplement at least 80% of your income on a tax-free basis.
Do I Need Disability-income Protection?
Most individuals and families would face significant financial difficulty if they, or their partner, were unable to work for any length of time. According to the Council of Disability Awareness, only 48% of Americans have sufficient savings to cover their living expenses for three months without earning an income.
With the lack of emergency savings, soaring medical costs and dwindling employer benefits, disability-income insurance has become an essential step towards protecting the financial future of your family. However, not everyone needs to obtain an individual disability-income insurance policy. Some individuals remain covered under their employer’s group policy, while government disability programs protect others.
What are the Chances of Becoming Disabled and Not Being Able to Work?
Currently, over 30 million Americans live with a disability, and only 17.9% are employed according to the Bureau of Labor Statistics. Furthermore, data released by the Council of Disability Awareness indicates that one in four of today’s 20 year-olds will be unable to work for at least a year due to a disability before retirement age.
Alarmingly, almost all disabling accidents and illness are non-occupational and, as a result, are rarely covered by workers’ compensation or social security. These findings can help explain why more than one in five (21%) of working-age, disabled Americans were living in poverty in 2015.
Disability Can Happen to Anyone
While we never believe it’s going to happen to us, the chances of disability are not as slim as you may think, and your current coverage may also not be as reliable as you first thought. Workers’ compensation only supplements your income if the disabling illness or injury occurs when at work, and according to the Social Security Administration less than 35% of social security disability claims were approved between 2006 and 2015.
If you need any assistance checking your coverage, Your Insurance Gal is happy to help.