Disability Insurance Articles

5 Myths About Disability Insurance

2010-07-15

Life is a gift, but illness happens, and accidents happen; they are a reality in life. The most valuable asset is the ability to earn an income. In the event of the inability to work, disability insurance can mean the difference between having a home and being homeless, having a portion of the normal income to pay for the necessities of life, or filing bankruptcy. Many don't purchase disability insurance because of myths that offer a false sense of security that result in irresponsible decisions and failure to indemnify against consequential financial loss.

One of the common myths is the belief that it won't happen to you. Statistics indicate that in the ten minutes that just passed, more than 350 people became disabled; a fatal accident or injury occurs every hour of every day. Furthermore, it is alleged that a person is 3 1/2 times more likely to suffer a disabling injury than to need the death benefit of a life insurance policy. Actually, a healthy life is not promised or assured; bad things happen on a regular basis to good, careful, and responsible people. If providence is kind, you may defeat the odds, but it is crucial to prepare for the worst and celebrate life.

Another misconception is that in the event of disabling illness or injury, Social Security Disability will replace the lost income. It is critical to realize that an injured person cannot apply for Social Security Disability for five months following the disability. Additionally, most applicants are denied coverage initially, delayed payment, and there are severe restrictions.

Many employees believe that if they are injured, workmen's compensation or unemployment insurance will replace their lost income - another myth. Workmen's compensation is paid only if the employee is injured on the job; unemployment benefits are paid if the employee is terminated.

A common excuse for not purchasing disability insurance is it is too expensive - another myth. Actually, this coverage is one of the least expensive insurance policies on the market today. Typically, the approximate cost is between 1-3% of the employee's income.

Finally, some employees assume that they have adequate resources to replace the lost income in the event of an illness or injury. The truth is even if one saved twenty percent of the earned income for ten years, one year without any earned income if disabled, plus the cost of medications and incidentals, those savings and any resources would be exhausted.

Consequently, disability insurance is not an option; it is a necessity. It has been aptly stated, and unequivocally true, that it is better to be safe than sorry.