Natural disasters like wildfires and severe storms have gotten a lot of attention recently – and for good reason. These disasters can strike at any time, often leading to absolute devastation, so disaster preparedness is critical.
You can say the same about a disability.
Why Disability Preparedness Deserves More Attention
A disability is typically an isolated event, impacting one individual at a time. For that reason, it doesn’t tend to garner the same headlines as a widespread flood or fire that displaces thousands of families at once. However, when you look at the disability numbers, it becomes clear that total impact of disability is massive enough to rival any natural disaster. According to the CDC, one in four U.S. adults has a disability.
Just like a natural disaster, a disability is often a physical threat with serious financial consequences. When a disability like a heart attack, stroke, or cancer diagnosis prevents you from working, you lose the paycheck you depend on to make ends meet. You’ll probably also incur unexpected expenses, like medical bills your health insurance doesn’t cover, and throughout all of this, your regular bills don’t stop.
You can try to reduce your natural disaster risks by making improvements to your property, but you may not be able to avoid disaster. Likewise, you can try to reduce your disability risks with healthy lifestyle choice, but even with the healthiest habits, there’s still a chance of a disabling illness or injury.
That’s why it make sense to purchase disability insurance, just as it makes sense to purchase property insurance. If your home is destroyed in a wildfire, homeowners insurance can cover the costs to rebuild, saving you from financial devastation. If you can’t work because of a disability, disability insurance can replace some of your lost income, once again saving you from financial devastation.
Unfortunately, there’s one point where the comparison between disaster preparedness and disability preparedness falters. According to a survey from the Insurance Information Institute, 88% of homeowners say they have homeowners insurance. According to a survey from LIMRA, only 18% of people say they have individual disability insurance. Most people are making the smart choice to protect themselves from the financial impact of natural disasters, but they’re not taking action to protect themselves from the financial impact of disability.
Disaster Preparedness and Disability Insurance
Beyond natural disasters, there are tons of personal disasters – cancer diagnoses, strokes and heart attacks to name a few. None of these are covered by workers’ compensation, and employer-sponsored long-term disability often doesn’t provide enough coverage.
With these facts in mind, here’s a quick list to share with your clients:
It’s Time to Protect Your Paycheck if…
- Your personal savings don’t provide a long-term buffer for extended unemployment. (Six months may not be nearly enough!)
- You’re not willing to put your family’s lifestyle at risk.
- You don’t want to stress about money while recovering from an injury or illness.
- Your greatest asset is your ability to work. (Do the math and you’ll probably find it is!)
- You’re not independently wealthy.
- You hate the idea of being financially reliant on friends or family members.
- You don’t want to dip into retirement savings or interrupt your ability to save for retirement.
- You plan to send your kids to college.
- You like the idea of keeping your house.
- You want to be sure that you won’t lose everything in the event of a disability.
Although disability insurance is generally overlooked, especially by young people, consumer advocates agree it’s an absolutely essential safeguard. With so many people living paycheck to paycheck and falling behind on their savings, it’s clear that many people can’t afford to miss work due to a prolonged disability – but the odds of that happening are higher than many realize. One in four 20-year-old workers will experience disability before reaching retirement age, according to the Social Security Administration.
If you had a one in four risk of your house burning down, you’d want to make sure it was insured. That’s a good reason to embrace disability preparedness with paycheck protection.
Need more information to share with your clients? Download our DI Stat Pack. Need a disability insurance quote? Request one here.