Disability Insurance Articles
How Unemployment Rates Affect Disability Insurance Rates
2010-12-20
The weak economy has produced unemployment rates that consistently hover around 10 percent. Add to that the number of people who have just given up looking for work, and that statistic gets closer to 17 percent. More than six million people have been unemployed for six months or longer. The stark reality demonstrated by that number is that a huge number of people will no longer be contributing to the country's economic growth. Instead, they will become dependent on public assistance, taking more than they can ever expect to replace, and forcing things like disability insurance rates to increase.
The federal government says disability applications are more than 50 percent higher than they were four years ago. That portends the possibility of real trouble in coming years. The disability insurance program run by Washington provides critical support for those unable to work because of illness or accident. That mirrors disability insurance plans offered by insurance companies. Both disability programs face similar problems because of the economic recession.
The increase in disability claims, for both Washington and insurance companies, hasn't occurred because of many more ailing people. The sad unemployment rates have forced more people to make disability claims for issues they can actually tolerate and would never have claimed if they were working. For insurance companies that sell disability plans, the financial crisis has produced massive losses. Some companies have even been forced to close shop.
Insurance industry prospects aren't too promising. Declining revenues, investment losses, and dismal credit ratings have put insurers on the hunt for anything that might boost revenues. They've had to raise disability insurance rates in order to help meet the strong demand for disability benefits. However, that becomes counterproductive as fewer out of work people are able to afford the increased premiums, while even more claims are made for benefits. It's a financial conundrum that likely can only be unraveled when the nation returns to full employment.
For those looking for a good disability insurance policy, expect to pay higher premiums for coverage that not so long ago was affordable for almost everyone. The ultimate benefit of disability insurance hasn't fallen away because of the economy. It still offers to protect your future should illness or accident make it less certain. Take the time to scour the Internet for insurance companies that offer somewhat reasonable prices for adequate disability coverage. Many qualified insurance companies are eager to vie for your business. Let them know they're in the race and find out how much disability insurance rates can be negotiated to your benefit.