Disability Insurance Articles
The Function Of Disability Insurance In Supplementing Income
2011-01-09
Nobody expects to become disabled and unable to work. However, statistics indicate that the risk of an accident or disability preventing a person from working is high. Disability insurance can protect individuals and families from the often devastating financial impact of disability by providing supplemental income in the event that a person cannot work.
The inability to work resulting from disability is far more common than most people believe. According to the United States Census Bureau's Public Information Office 51 million people were classified as disabled in 2008. This figure represents 18 percent of the United States population. Additionally, the Social Security Administration reports that three out of every ten workers entering the workforce today will become disabled and unable to work at some point before retirement. These numbers are staggering and indicate that the protection disability insurance is one of the most important financial protections available today.
For many individuals and families, the inability to earn even a single paycheck can be devastating. Reports on the financial impact that disability often has on families are staggering. In 2005, nearly fifty percent of all mortgage foreclosures and upward of 350,000 cases of personal bankruptcy resulted from disability or illness.
Disability insurance helps prevent you from becoming a part of these sobering statistics. Although most disability insurance policies do not pay a person one hundred percent of pre-disability income, they do provide the supplemental income often needed for individuals and families to stay afloat. Disability insurance policies differ, but most pay the policy holder between forty and eighty percent of pre-disability income.
It is important to remember that most disability insurance policies place a cap on the length of time they will pay in the event of an accident or disability. Although time limits vary by policy, an average cap is five years from the time a person becomes disabled. However, insurance statistics indicate that the average long-term disability absence from work is only 2.5 years. This indicates that while many people will have a need for the supplemental income from a disability insurance policy during their working career, most will eventually recover enough to return to work. When purchasing a disability insurance policy, it is important to closely review any time limits or caps on benefits.
When people think about disability, they often think of bizarre accidents. While these do happen, the majority of disabilities are the result of common back injuries or illnesses such as heart disease and cancer. Essentially, disability can strike anyone at anytime and the financial effects are often devastating. The right disability insurance policy can provide individuals and families with security and peace of mind that come from knowing they are protected.