Disability Insurance News
April 19, 2005: Do You Need Disability Insurance?
Though it is hard to think about, the reality is one-third of all Americans between the ages 35 and 65 will become disabled for more than 90 days, according to the American Council of Life Insurers. This was reported in an April 19, 2005 article on the Smart Money Web site.[1]
It stated that one in seven workers will be disabled for more than five years. And while many think disabilities are typically caused by freak accidents, the majority of long-term absences are due to illnesses.
The loss of income can be so severe that 46 percent of all home foreclosures are caused by a disability, according to the U.S. Department of Housing and Urban Development.[2]
Even if you have a solid policy through your work, you may still want to purchase additional insurance on your own.
About half of mid- to large-sized firms offer benefits that last for at least five years, according to America's Health Insurance Plans, an industry lobbyist.[3] But even if have this coverage, the plan may not be enough. After all, you probably can't afford to live on just 60 percent of your salary.
If you are self-employed or not covered by your employer, you should definitely consider purchasing an individual plan.
According the article, in an ideal world, everyone would have coverage until age 65. The most comprehensive policies include "a cost-of-living adjustment" and a "future purchase option," which allows consumers to increase their coverage as they earn more money without having to take another physical.
Getting the right coverage at the right price is important. Unlike term life insurance, which you can easily buy online, you'll probably want to sit down with a professional when you buy long-term disability.
References
- Bradford, Stacey L. "Do You Need Disability Insurance?", Smart Money Web site, April 19, 2005. http://www.smartmoney.com/insurance/disability/index.cfm?story=disability2005
- http://www.hud.gov/
- http://www.ahip.org/