Published by: Sharon McReynolds, PEO and Agency Partner
May is Disability Insurance Awareness Month and the Council for Disability Awareness aims to shed light on ways to prepare for disability, particularly financially. Our country is facing a growing crisis and a lack of adequate disability insurance coverage. Today, an insufficient emergency savings fund, the rise of medical costs and overall trend of fewer employers offering benefits to workers has created an issue for many working Americans and their families. Without disability protection, or income protection, more and more Americans are experiencing severe financial difficulty if they need to miss work due to illness, injury or even pregnancy.
From the Council for Disability website here are some of the critical numbers:
- More than one in four of today’s 20-year olds can expect to be out of work for at least a year because of a disabling condition before they reach normal retirement age. Source: Social Security Administration, Table A
- At least 51 million working adults in the United States are without disability insurance other than the basic coverage available through Social Security.
- Only 40% of US households have at least $6,275 in liquid savings. That is what it would take an average family of four to replace income at the poverty level for three months. Source: Federal Reserve, Page 26
- Four of out ten American adults indicate they would not be able to pay an unexpected $400 bill without having to carry a balance on their credit card or borrow money from a friend, family member or bank.
- The chances of missing work due to illness, injury or pregnancy are greater than most realize. Each year, around 5% of working Americans will experience a short-term disability lasting six months or less, almost all of these non-occupational in origin.
The most common instances for missed work due to short-term disabilities are pregnancies (22%), musculoskeletal disorders (19.9%), injuries such as fractures, sprains or strains (11.6%), digestive disorders (7.8%) and mental health issues (7.1%). The most common instances for missed work due to long-term disabilities are musculoskeletal disorders (29.7%), cancer (14.8%), injuries such as fractures, sprains and strains (12.3%), mental health issues (8.6%) and circulatory issues such as strokes and heart attacks (8.1%).
If you believe Social Security has you covered, you should know the average Social Security Disability Insurance benefit for a disabled worker as of early 2019 was $,1234 monthly. That equates to just $14,808 annually, barely above the poverty guidelines for a one person household.
I strongly encourage business owners to request information from your insurance broker related to the cost for group long-term disability insurance (LTD) for you and your employees. You will be pleasantly surprised at how cost effectively you can insure all of your employees against the catastrophe of losing their paycheck. We have assisted in placing this coverage for many of our clients and have been writing disability coverage for both groups and individuals for over 35 years.
If you would like more information on disability insurance, visit the Council for Disability Awareness website.