People with disabilities make up nearly 20% of the United States’ population. More specifically, 56 million Americans live with a disability. Of that number, 38 million people (one in 10) live with a severe disability.
While many individuals believe that becoming disabled is not something that they will have to experience themselves, being prepared for that possibility makes sense. What would happen if you were unable to work, even temporarily? How would you provide for yourself and your family? Disability income insurance may be a necessity should you find yourself temporarily or permanently unable to work.
Consider six reasons why disability income insurance is so important:
Reason #1: Anyone can become disabled at any time.
One out of every four people who are 20 years old today and who work until retirement age will become disabled, whether temporarily or permanently. Having disability income insurance coverage before that happens will allow you to focus on recuperating, and less on worrying about how you are going to pay your bills and meet your basic needs.
Reason #2: Your coverage from your employer may be non-existent (or close to it).
Only 41% of employers offer long-term disability income insurance. Employers may cover the expense entirely, or require employees to chip in. Most group plans only pay 60% of your monthly salary, with a cap between $5,000-$15,000. So, while you may be lucky enough to have disability coverage through your employer, it may not be enough for you to pay for all of your monthly expenses. Besides, it all hinges on you remaining employed with that employer. Employer-provided disability income insurance is not generally portable, but an individual, non cancellable, and guaranteed renewable policy policy that you own yourself, is.
Reason #3: Social security benefits aren’t high.
According to the Social Security Administration, in 2015, the average monthly benefit was $1,165, for a yearly total of $13,980. The SSA notes that that amount is “barely enough to keep a beneficiary above the 2014 poverty level ($11,670 annually).”
The 2016 poverty threshold for a single individual under the age of 65 is $12,486. Think about how those amounts compare to your current monthly and yearly income. Disability income insurance can potentially supplement those benefits. You also may only apply for Social Security benefits if you are expected to be unable to work for at least 12 months and your claim for Social Security benefits is also 72% likely to be denied.
Reason #4: Most people lack emergency savings.
The Federal Reserve Board released in May 2016, its Report on the Economic Well-Being of U.S. Households in 2015. Researchers found that only 47% of people said that they had emergency savings for unexpected expenses. This suggests that many people would find themselves in dire circumstances were they to become disabled and lose their income for an unforeseeable length of time.
Reason #5: The average long-term disability claim is nearly three years.
It is possible to become temporarily disabled and out of work for a few weeks. However, according to the Council for Disability Awareness, most long-term disability claims are for 34.6 months, a substantial time to be without your regular income.
Reason #6: Disability income insurance can provide you with a monthly income.
If reading the above reasons have made you understandably anxious, know that disability insurance may provide a monthly benefit that can help pay your bills and other expenses should you find yourself disabled and unable to work.
Since anyone can become disabled at any time, you likely will not have “advance notice” that you are going to find yourself unable to work and therefore be without income. Our ebook, “Proven Methods to Growing Your Dental Practice Patient List,” offers an array of ideas to assist dental practices as they grow their patient list. Treloar & Heisel has helped dentists with their insurance needs for many years; we’d love to assist you with yours. Click here if you’d like to discuss your insurance requirements with one of our specialists today.
About Treloar & Heisel
Treloar & Heisel is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.