Money Matters

Think you don’t need disability insurance? Think again!

22 Nov 2016 by: jhurley 

Long-term disability payments don’t replace your salary; they provide a buffer—usually 60% of your salary. That means that most recipients have to adjust their lifestyles and priorities.

The Social Security Administration estimates that one in four 20-year-olds will become disabled and unable to work before they reach the age of 67. In 2012, more than 650,000 disabled workers received more than $9 billion in long-term disability benefits through employer-sponsored group disability.

Don’t count on worker’s comp! Worker’s comp replaces lost income if an injury or illness occurs on the job, but fewer than 5% of disabling accidents and illnesses are work-related. Most (90%) of long-term disability claims are for illnesses, not accidents.

Disability is not a man’s problem. 60% of the Unum long-term disability recipients over the 2009-2012 time period were women.

Too young to worry about it?   41% of Unum long-term disability recipients over the 2009-2012 time period were younger than 50, with a third of those under 40.

I‘ll buy my own coverage. Individual disability insurance is considerably more expensive than employer-sponsored coverage. Yet only a third of private industry workers have access to employer-sponsored coverage, according to the Bureau of Labor Statistics. Some employers pay 100% of the premiums; some share the cost with employees; and some offer it as a voluntary employee benefit, requiring the employee to pay 100% of the premium. Before you go on the individual market to try to buy a better policy, check if your employer gives you the option to “buy up” and add additional coverage.

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