Disability: The Ignored Risk

by Ron Haynes

Most people are more than willing to buy some life insurancejust in case. But young people especially need disability insurance. Why? In your younger years, you’re earning income, and losing that income to a disability event could have a devastating financial impact. In fact,disability is more likely to occur during your younger, income earning years than when you’re in your 50′s. A 30 year old is more than TWICE as likely to become disabled than to die!

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Disability statistics

  • Someone 35 years old has a 50 percent chance of disability for 90 days or more before turning 65.
  • Most people in the U.S. are better prepared financially in case of death (via life insurance) than for a disability, but the chances are at least three to five times greater (depending on age) that a disability will occur.
  • Approximately 375,000 Americans become totally disabled every year.
    About one out of seven people who are between the ages 35–65 can expect to become disabled for five years or longer.
  • Almost 30 percent of the people who are between the ages 35 and 65 will experience a disability that lasts at least 90 days during their working careers.
  • About 110 million Americans have NO long term disability insurance.
  • About 8 million adults have some type of disability that limits or prevents them from working.
  • About 46 percent of all foreclosures on conventional mortgages are brought about by a disability, while approximately 2 percent are caused by the death of the homeowner.
  • Benefits from an employer plan are usually taxable but individual policies, purchased as an individual with after tax dollars, usually pay benefits income tax free.
  • Most people, no matter their income, spend 65 percent to 75 percent of their cash flow (some 100%). Aim toward securing as much disability income insurance as possible toward the goal of replacing that income.
  • If you put away 10 percent of your income each year, then one year of being totally disabled could wipe out the 10 years of principal that you put into your savings.
  • How good is social security disability income (SSDI)? Anyone at any income level can apply for Social Security Disability Insurance but one requirement is that you have to have worked at least 10 years before becoming disabled.
  • The Social Security disability Insurance program pays $722 per month on average. The requirements to receive disability benefits are so strict that only about 35 percent of the individuals that apply for benefits actually qualify and wind up receiving benefits.
  • The most common chronic conditions listed for limitation on working are back disorders (21 percent), followed by heart disease and arthritis. Injuries account for only 14 percent of disability claims.

Disability insurance is designed to replace a portion of your income if you become temporarily or permanently disabled by illness or injury. But remember that disability insurance isn’t only for people in high-risk jobs, such as Alaskan king crab fishermen or aircraft test pilots. Everyone who depends on income from work to pay their daily expenses should have disability insurance. If others, such as children, your spouse, your elderly parents, or other family members depend on your income, it is vital.

Get your FREE personalized disability insurance quote.

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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