If you have bills, you need a disability income plan.
Most people don’t want to think about it, but illness or injury can happen to anyone. A back injury, cancer, or even a mental health challenge can take you out of work for an extended period. To get by with no income, most people think they’ll rely on savings or paid time off, but how long will those last? Nearly 4 out of 10 American adults can’t pay for an unexpected $400 expense1 if it comes up.
Your income is your most valuable asset. Make sure it’s protected.
You have insurance for your home and your car. Health insurance helps pay medical expenses but doesn’t help you pay your mortgage, car payment, or grocery bill if you’re hurt and can’t bring home a paycheck. Disability insurance is income insurance. If you experience an unexpected, covered injury or illness, it provides a portion of your income for a period of time to allow you to pay your bills, and recover with less financial stress.
Many people think, “I’m pretty healthy. Why do I need disability insurance?”
The name “disability insurance” itself can be confusing. This isn’t just about catastrophic health issues. You may be completely healthy, but something like a broken bone or pregnancy can put you out of work for days, weeks, or months at a time. This poses a financial challenge: how do you pay your bills while you recover?
Disability insurance helps you recover from mental and physical illnesses and injuries by providing a financial safety net. It helps keep your life on track.
Your chance of missing work due to an illness, injury, or pregnancy is greater than you think.
Prior to the pandemic, around five percent of workers experienced a short-term disability (six months or less) due to illness, injury, or pregnancy.2 Three-quarters of these claims last up to two and a half months, and the rest can last up to six months or a year.3 How will you pay your bills if you aren’t earning an income during this time?
Almost one in four of today’s 20-year-olds can expect to be out of work for 12 months or more because of a disabling condition before they reach the normal retirement age.4 This includes health conditions such as knee, shoulder, or back injuries, cancer, heart problems, or depression.
Chances are, you’re not prepared.
If you’re like many Americans, you don’t have enough savings to cover three months of living expenses. Over a third of consumers today say they can’t pay an unexpected $400 bill without having to take out a loan or sell something.1
This is where disability income insurance comes in. Disability insurance pays you a portion of your income when you need to miss work for as brief a period as a few days to as long as until you reach your retirement age.
This is the only insurance product that helps cover your day-to-day expenses in this way. Health insurance covers medical bills. Worker’s compensation only pays for injuries that happen in the workplace. Disability insurance protects your income.
- Federal Reserve, Report on Economic Well-Being of U.S. Households in 2022 – May 2023 https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-expenses.htm Figure 19.
- Integrated Benefits Institute, IBI Benchmarking Analytics Series: Which Diagnoses Drive STD Incidence, Costs and Lost Time? https://www.ibiweb.org/resources/ibi-benchmarking-analytics-which-diagnoses-drive-std-incidence-costs-and-lost-time . During the pandemic (2020-22), there was a 57% increase in the rate of health-related absences from work compared to the five-year period ending in 2019, and in 2023 absence rates had yet to return to pre-pandemic levels. (Source: https://www.linkedin.com/pulse/health-related-work-absence-2023-we-entering-new-era-fred-schott-i2f2e/
- https://www.bls.gov/opub/btn/volume-4/pdf/disability-insurance-plans.pdf
- Social Security Administration, Disability and Death Probability Tables for Insured Workers Who Attain Age 20 in 2023 https://www.ssa.gov/oact/NOTES/ran6/an2023-6.pdf Table A, Column 1 (Probability of Disability Before NRA).
