Accidents happen and illnesses happen. Sometimes, it comes from ourselves, and other times, it’s an auxiliary instance of suffering injury from the actions of those around us.
Consider the popularity of cycling but also the rise in risk around cyclists sharing the road with cars– specifically with drivers behind the wheel, who may be distracted. Each year, over 130,000 cyclists are injured resulting from vehicular crashes when on roads in the United States.
So, again, accidents do happen– that’s one of the guarantees of all the variables of living and enjoying life in all the ways we do. Not everyone may ride bikes, but we all have our interests and the risks that come with them, even if they may seem small and unlikely. The thing that isn’t a guarantee though? Besides what comes after the bumps, the bruises, and the run-ins? Having the right coverage and protection provided by disability insurance.
Referring back to shared road statistics around cyclists at risk of retaining injuries, the Center for Disease Control and Prevention, the CDC, states, “The costs of bicycle injuries and deaths from crashes typically exceed $23 billion in the United States each year. These costs include spending on health care and lost work productivity, as well as estimated costs for lost quality of life and lives lost.”
That does sound like quite the high price, right? But what’s more notable? The root causes of those costs. Accidents, especially those that take us away from being able to fully live our lives, and engaging in the work that funds our lives, have an impact that can be worse than the injury itself.
What does all of this mean?
Having Disability Insurance
We live, and we work. Sometimes, something happens that inhibits the ability to continue working. It’s not always an accident; in fact, it’s estimated that 90% of disabilities are actually a result of illness rather than accident. Unfortunately, though, our bills– the long standing, and the new– still need to be paid. Beyond general risk mitigation, what else can be done to add protection and awareness as to not be caught in this situation unprepared?
This is where Disability Insurance comes in.
It assists in providing the protection that acts a bit more like insurance for your income. Short term private disability insurance can cover & replace 40% – 70% of your income for 13 – 26 weeks following a claim that demonstrates what is keeping you from your work, and the need for such assistance.
Think of it this way:
Americans are actually six times more likely to be unable to work for an extended period of time than to be killed by accident during their working years.
At the same time, often noted from “a lack of knowledge and indecision,” the percentage of Americans with private disability insurance dropped from a high of 31% in 2012, to just 14% in 2021.
This, paired with an upward trend of the likelihood of more than 1 in every 4 of today’s working 20 year olds being out of work for more than a year due to a disabling condition, brings this conversation to the forefront. “Lack of knowledge and indecision” should not be the limiting factors in being properly covered & protected with so much data and information being shared today.
5 Common Questions About Disability Insurance
Is private Disability Insurance the same as Workman’s Compensation?
Workers’ compensation only covers time away from work if the disabling illness or injury was directly work-related. It is also to be considered that worker’s compensation only covers employees while in the scope of employment– that means, while “on shift” or “on the clock” not just on the premises but “clocked out”.
While there are given hours and requirements for workman’s compensation, disability insurance tends to be 24/7, 365.
Also note: Only one state does not require employers to provide and fund some level of worker’s compensation & employer’s liability. That state is Texas. This does not mean that employers won’t be held responsible, it is simply not a legal requirement.
What is the difference between private Disability Insurance and Social Security Disability?
The federal disability services and support, otherwise known as Social Security Income (SSI) is a federally-managed system that provides social security income and disability benefits to persons that are disabled by SSI definitions. These individuals can therefore earn SSI before the minimum mandatory “retirement age” identified in the Social Security Administration website. This long term disability income is available in all 50 states.
There are also state-managed and state-provided short-term disability income replacement plans available in 5 states. This is a tax-funded program to replace income for persons that are injured that may not have other means of generating “unearned” income while out of work temporarily or permanently.
The five states with state disability plans are California, Hawaii, New Jersey, New York, and Rhode Island.
These programs are tax funded whereas private disability insurance is a policy paid for in order to build protection in case it is needed.
Many individuals still purchase private disability insurance to ensure proper coverage & protection.
How is Long Term Disability Insurance different from Short Term Disability Insurance?
In short, the differences arise in the percentage of income covered and for how long. Long term disability insurance.
Long term disability insurance can cover up to 60% of impacted income for years following the disabling condition, and can even flow through retirement age.
Short term disability insurance can cover 40% – 70% of impacted income for 13 to 26 weeks.
What qualifies for a private Disability Insurance claim?
There are many causes for making disability insurance claims.
The most common reasons for making a short term disability claim are:
- –Pregnancies (22.3%)
- –Musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body (18.5%)
- –Injuries such as fractures, sprains, and strains of muscles and ligaments (11.4%)
- –Digestive disorders, such as hernias and gastritis (7.4%)
- –Mental health issues including depression and anxiety (7.3%)
The most common reasons for making a long term disability claim are:
- –Musculoskeletal disorders (27.6%)
- –Cancer (15.0%)
- –Injuries such as fractures, sprains, and strains of muscles and ligaments (12.0%)
- –Mental health issues (9.3%)
- –Circulatory (heart attack, stroke) (8.2%)
What are the benefits of private Disability Insurance?
Some of the variables include:
Because benefits are normally purchased at 2/3 of normal income the total amount of coverage.
Age of covered person.
Overall health condition and health history of covered person.
Full-time occupation of covered person. If some sort of highly technically trained profession, how quickly and easily would that skill translate to the covered person generating their own income, back to previous levels? An example is a top-level litigation attorney, making $500k/ year could lose her eyesight, rendering her unable to practice law.
However, she lives close to, and is an alum from Harvard. If she were able to become employed at Harvard teaching technical law classes and could generate $300k/year, then her income would be “replaced”. A veteran over the road truck driver may not have the luxury of transfer of skills to teach. Therefore his premium could actually be as high as the attorney’s, even though he only needs to obtain coverage of $100k at a 2/3 level of pre-disability gross income.
Lastly, risky hobbies and travel schedules can be factors that underwriters consider strongly.
With this depth and breadth of variables perhaps a 1:1 conversation is in order!?
Lack of knowledge and indecision acting as the barriers to making the right choice lift when you discover the information you can understand and can trust. It helps even more so when you are then met with by the providers that can answer your questions, provide a quote, and even discuss potential discounts making the right coverage possible.
Visit our Disability Insurance service page to learn more,
or give us a call at