Understanding Disability Insurance Month

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May is Disability Insurance Awareness month, and there is, by all appearances, a serious need for it. So few folks ever think they’ll need disability insurance, and many more don’t even know it exists. To help alleviate this problem, the Council for Disability Awareness sponsors Disability Insurance Awareness Month to help spread the word about the need for disability insurance.

Debilitating injuries and illnesses can strike anyone. Car accidents happen every day. Joggers and pedestrians are injured every week. Weekend warriors throw out backs, blow out knees and break bones in backyards, basements, and bathrooms all across the country. No one is truly immune from the possibility of obtaining a disability that can put them on the sidelines and out of work for months, or even longer.

Every 7 seconds someone in America experiences an illness, injury, or accident that creates a job loss of at least one month, according to the Council for Disability Awareness. Unfortunately, no one is immune.

The average US worker thinks they only have a 2% chance of being disabled for more than 3 months. The actual figures are closer to 25%. Almost 2/3 of bankruptcies involve medical problems or issues that lead to a loss of income or decrease in income. Nearly 50% of all home foreclosures could be traced to loss or decrease of income due to medical problems or issues. And yet, even with those facts, about 100 million American workers are without any type of long term disability insurance to help avoid loss of income due to medical issues, injuries, or illnesses. Many depend on the Social Security Disability benefits or Workers’ Compensation to cover them in the event of a debilitating illness or injury. Unfortunately, the statistics tell a disappointingly bleak story:

  • Nearly 65% of claims are denied
  • The average SSDI monthly payment for men was $1256, for women – $993
  • 46% of SSDI recipients receive less than $1000 monthly
  • 93% of all SSDI recipients receive less than $2000 monthly
  • Less than 5% of all debilitating injuries and illnesses are related to the workplace, meaning that more than 95% of all disabling illnesses and injuries aren’t eligible for any Worker’s Compensation

All this means that the great majority of families affected by disabling illnesses and injuries are left without any governmental financial assistance whatsoever. And relying on savings to see them through isn’t a good idea either. The majority of disabilities that last more than 3 months, last for at least 2 ½ years. The average work-loss or career-ending disability lasts for 31 months. Few families have savings for more than a month or two, three at the most. That certainly explains both the loss of homes due to foreclosure and bankruptcy claims related to medical issues, and the dire need for disability insurance.

Even some things that you may not think of as disabilities can create job loss or income decrease. Pregnancy and maternity leave can cause financial hardship on a two-income family. A sprained ankle and a missed week of work can create havoc for a self-employed contractor. A car accident causing a concussion can debilitate a delivery driver. Minor injuries, a new baby—medical issues you would never think of as needing a safety net for—can cause problems if not properly prepared for. And that’s where disability insurance can really save the day.

Given the facts and figures above, provided by the Council for Disability Awareness, it should be easy to see that most American workers need some level of disability insurance. They need to be aware of the risks and the opportunities that exist to avoid those risks. Disability insurance can cover everything from short term sprained ankles and bumped heads, to the demands of a new baby, to something catastrophic like cancer or a back injury. So celebrate Disability Insurance Awareness Month by making sure you have the coverage you need, and by encouraging friends and family members to do the same.

AdminUnderstanding Disability Insurance Month