DI Facts & Statistics

You probably take plenty of precautions in your daily life... you wear your seatbelt, you childproof your home, you own malpractice insurance, you have a working smoke detector.

You don't do these things because you plan to crash your car, intend to fatally injure a patient, or aspire to burn your house down next year - you take these precautions to limit the damage & loss if these things happen.

Nobody thinks they will get "disabled"; however, many people know that they might get sick or injured during their income earning years (ages ~20-65) - A sports injury, a car accident, an illness, a problem pregnancy, a heart attack, a serious back injury - any of these situations can result in your inability to work at your usual job. That, in turn, means a loss of income, even if you have a relatively sedentary job. Is your income wearing a seat-belt??

Disability is more common than you think!

According to a recent study, most people estimate they have only a 16% chance of becoming disabled during their working years⁽¹⁾ in spite of the following startling facts⁽²⁾:

• If you're under age 35, chances are one in three that you will be disabled for at least six months during the course of your career.
• Men have a 43% chance of becoming seriously disabled during their working years.
• Women have a 54% chance.

The data is overwhelming as to the chance of disability, duration, and impact on individuals and families.

• Over 51 Million Americans are classified as Disabled (18% of the population!) ⁽³⁾
• 3 in 10 workers entering the workforce today will become disabled before retiring. ⁽⁴⁾
• An illness or accident will keep 1 in 5 workers out of work for at least a year before the age of 65. ⁽⁵⁾ 
• Disability causes nearly 50% of all mortgage foreclosures. ⁽⁶⁾
• One in 7 workers can expect to be disabled for five years or more before retirement. ⁽⁷⁾

Disability is much more common than Premature Death!

• At age 42, it is four times more likely that you will become seriously disabled than that you will die during your working years. ⁽²⁾
• Premature death only causes 2% of all mortgage foreclosures. ⁽⁶⁾

¹ Gallup survey conducted for UNUM Corp, reported by Best's Review
² "Why Disability", published by National Underwriter
³ U.S. Census Bureau, Public Information Office, November 2008
⁴ Social Security Administration, Fact Sheet January 31, 2007
⁵ Life and Health Insurance Foundation for Education, November 2005
⁶ Health Affairs, The Policy Journal of the Health Sphere, 2 February 2005
⁷ "Commissioners Disability Table, 1998," Health Insurance Association of America, the New York Times, February 2000

Disability Insurance is expensive - or it is?!

Look at this chart and consider the relative "expense" of Disability Insurance

I'm sufficiently covered by my Group or Association-Sponsored Long Term Disability Plan - take a closer look!

Could your family live the life you want and plan for retirement on a FIXED income of 50-60% of your base salary?

Most Group LTD benefits usually cover 50-60% of your earnings (often excluding bonuses, overtime, pension contributions, 401(k) Matching contributions) and are usually reduced by any Government program benefits you may receive.

In addition, most Group plan benefits are fixed at the time disability occurs -- there are no cost of living increases, so you are stuck on a fixed income, unable to make up for inflation as living expenses increase!

Can you and your family live the life you want on that type of income? Would you want to?

Could your family live the life you want and plan for retirement on a FIXED income of 50-60% of your base salary, less taxes!? That nets ~30-50% of your base income!

Most Group Disability Plans are paid for by the Employer (giving the employer an annual tax deduction). This means that any benefits you receive when on claim will be fully income taxed!

Can you and your family live the life you want on that income? Would you want to?

I can no longer perform Surgery due to my injury or sickness, but I am able to Teach or work in a Call Center at a substantially lower income.

Most Group Disability Plans stop paying benefits once you are fit to return to ANY occupation. In most Group Plans it does not matter that your new employment pays you much less than your former occupation.

Should you limit you and your family's future by depending on the current and future legal language in a Group Plan?

I'm certain my Group Plan will always be there for me

Most Group Disability Plans end when your employment ends. If you change employers, you may have a better, worse, or no Group Disability plan. If you get laid off, most Group Coverage ends. As employers seek ways to reduce costs and increase profits, group benefits may be a target.

How much control & certainty do you have?

My retirement will be fine - I have Group LTD

Most Group Disability Plans stop paying benefits at Age 65. What income sources will you live on then? You cannot contribute to 401(k)s or IRAs if you are on Disability since you do not have Earned Income. Additionally, since you will be living on substantially lower income while collecting Group LTD Benefits, you may not have sufficient excess income to save in other vehicles for your retirement AND pay for your living and medical expenses.

What are your financial strategies to counteract this possibility?

Common Causes of Disability

source: HIAA Source Book of Health Insurance Data 1999-2000.

Even more statistics about Disabilities can be found at: YourIncomeAtRisk.Org and DisabilityCanHappen.Org.