2 out of 3 American families live paycheck to paycheck; 70% of
families can only afford to be without a paycheck for 1 month or less (Source: The Council of Disability Insurers, The Long Term Disability Claims Review: 2005) 
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Disability is the leading cause of personal bankruptcies and causes nearly 50% of all mortgage foreclosures, compared to 2% by death (Source: The Council of Disability Insurers, The Long Term Disability Claims Review: 2005) READ MORE
Disability Insurance News
March 6, 2006: Insuring Against the Unthinkable
Focusing on day-to-day life, many fail to plan for the future. And for those who are planning for the future, few of them are protecting it. This is where disability insurance and catastrophic disability benefit riders come into play, according to an article written by Bryan Musa, a director of disability income insurance at Massachusetts Mutual Life Insurance Company, Springfield, Mass.[1]
Many business owners and employees who have coverage through their workplace may be focusing only on the short term, and many may not have looked beyond to the potentially devastating effects, if a disability leaves them sick or injured and unable to work, says Musa.
Workers should understand the importance of catastrophic coverage and make sure any policies purchased provide adequate protection in the event that the unthinkable occurs. A catastrophic disability benefit rider, or CAT rider, can prepare policyholders to face severe or life-changing disabilities that might quickly exhaust basic disability benefits, says Musa.
A catastrophic disability is defined as one that causes a person to be unable to perform two of six activities of daily living without assistance, or causes irrecoverable and irreparable loss of hearing, sight or speech or the use of either both hands or both feet, cites the article.
For extra protection, individual disability income insurance coverage can supplement group coverage already offered by employers. Many people don't realize group plans fall short by typically covering 60 percent of income, depending on tax status. In addition, many who earn commissions or bonuses forget to include these sources of income in benefit calculations. Ignoring commissions and bonus earnings can leave clients with monthly benefits that are too low to cover basic living expenses, says Musa.
A long-term disability could leave anyone challenged to pay ongoing expenses, such as a mortgage, car loans, child care, education and credit card balances. By purchasing a supplemental disability policy with CAT coverage, policyholders can potentially protect up to 100 percent of their income, says Musa.
References
- Musa, Bryan. "Insuring Against the Unthinkable," March 6, 2006. http://www.lifeandhealthinsurancenews.com/NR/rdonlyres/5DAE69F6-401A-4ED5-B214-14B0E473695F/161685/L09DIScatriderBM92.do