Millions of working Americans face a growing crisis: a lack of adequate disability insurance coverage.

The disability statistics are concerning. The absence of emergency savings, rising medical costs, and an overall trend of fewer employers offering benefits to workers has created a critical blind spot for many American workers and their families. Without some income protection, more Americans are experiencing severe financial difficulty if they need to miss work due to illness, injury, or pregnancy.

A lack of adequate disability coverage.

• At least 51 million working adults in the United States are without disability insurance other than the basic coverage available through Social Security¹.
• Nearly 4 out of 10 American adults indicate they can’t pay an unexpected $400 bill without having to carry a balance on their credit card or borrow money from friends, family, or the bank².

Chances of missing work due to illness, injury, or pregnancy are greater than most realize.

• Almost one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age.³
• Prior to the pandemic, around 5% of working Americans experienced a short-term disability (six months or less) due to illness, injury, or pregnancy.⁴ Almost all short-term disability plans involve non-occupational coverage. ⁵

The most common reasons for short-term disability claims are⁶:

1. Pregnancies (18.0%) 

2. Infectious/parasitic diseases, including Covid-19 (15.9%)
3. Musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body (15.1%)
4. Injuries such as fractures, sprains, and strains of muscles and ligaments (9.9%)
5. Mental health issues including depression and anxiety (8.3%)

The most common reasons for long-term disability claims are⁷:

1. Musculoskeletal disorders (25.2%)
2. Injuries such as fractures, sprains, and strains of muscles and ligaments (13.1%)
3. Cancer (11.5%)
4. Mental health issues (9.1%)
5. Circulatory (heart attack, stroke) (7.3%)

The consequences are alarming.

• A large study of consumer bankruptcy filings found that 77.8% of debtors cited income loss as a contributor to their bankruptcy. This included 44.3% specifically citing medically-related work loss as a contributor.⁸
• A large-scale study linking cancer registry data and credit records in western Washington state found that cancer patients were 71% more likely to experience a severe adverse financial event and 28% more likely to have past-due credit card payments than people without cancer.⁹

Workers’ Compensation and Social Security do not cover most of these challenges.

• Workers’ Compensation only covers time away from work if the disabling illness or injury was directly work-related. In 2022, only 1.3 percent of American workers missed work because of an occupational illness or injury.¹⁰
• From 2012 to 2021, only 30 percent of Social Security Disability Insurance (SSDI) claimants had their applications approved: around 20 percent at the initial application stage and the remainder after a reconsideration or appeals process.¹¹
• It generally takes three to five months from time of application for SSDI benefits to get an initial decision.¹²
• The backlog of appeals cases was more than 343,000 in fiscal year 2022, with 35 percent of them being over nine months old.¹³
• The average SSDI benefit for a disabled worker as of February 2024 was $1,537 a month.¹⁴
• That equates to $18,444 annually – which is below the poverty guideline of $20,440 for a two-person household.¹⁵