At least 35 percent of working Americans don’t have private disability insurance. And what that means is approximately 50 million people won’t receive a paycheck if they leave work to have a baby, or are recovering from an injury or an illness.
Working adults need disability (or income protection) insurance because people regularly leave work for short — or even long — periods of time. About 70 percent of full-time employees have sick days or vacation time they can tap into for short absences, but you could become financially strapped if you need more than five or 10 days off.
Depending upon the type of industry where you work, six to 10 percent of people are out of work long enough that they file a short-term disability claim (insurance that covers the first three to six months of your time off). Seventy-five percent of these people are out of work up to 75 days, and the rest can be out for 180 days or a year.
Meanwhile, the Social Security Administration says that more than one in four of today’s 20-year-olds will be out of work for 12 months or more for a variety of reasons before they retire.
Here are the top five reasons why people are out of work for three months or longer (according to a database representing long-term disability claims from a large group of disability insurance carriers):
1. Pain in your back and joints (aka musculoskeletal disorders)
Knees battered by too much hard running, ligaments torn on the ski slopes or from chasing kids, and back pain from too much time spent sitting, lifting or gardening: These are all examples of musculoskeletal disorders that are responsible for a nearly third of all long-term disability claims.
These results are consistent with information from the 2016 Social Security Disability Insurance database. If you want to try to prevent these type of injuries, shore up your body’s strength by engaging in exercise, eating healthy, and being very aware of repetitive movements you undertake everyday. Repetitive motion can include activities like driving to work and playing tennis.
American adults have a one-in-three lifetime chance of being diagnosed with cancer, according to the most recent data from the US National Cancer Institute’s Surveillance Epidemiology and End Results (SEER) database. We see this risk reflected in LTD claims where cancer is in the second leading reason why people are out of work for three months or longer (15 percent of all claims). It’s important to know that it’s treatment for cancer — not the condition itself — that causes people to leave work temporarily.
Cancer can arise from endless possibilities, from your genetic makeup, to the environment around you, to your lifestyle. The Mayo Clinic recommends seven key ways you can build up your body’s defenses against cancer: avoid tobacco, eat a healthy diet, maintain a healthy weight and be physically active, protect yourself from the sun, get immunized, avoid risky behaviors, and get regular medical care.
3. Complications of pregnancy
Many people are surprised to see pregnancy listed as a cause of disability claims. In fact, it’s the number one reason why people file a short term disability claim. Women are typically paid six to eight weeks of disability benefits after they give birth to a child.
There will be times when a woman’s physician will determine that, for her own health and that of her baby, she needs to stop working in advance of delivery. In most cases, that pre-delivery absence iscovered as well.
But why would pregnancies show up as a top reason for long-term disability?
“About 50 percent of LTD plans have a three-month waiting period (also known as an elimination period), while the other half of plans have a six-month period before benefits are payable,” explains Fred Schott, Director of Operations at The Council for Disability Awareness. “A STD plan, sick days, or paid-time-off bank often covers all or part of the long-term disability elimination period.”
Schott says that three-month waiting period plans are common in industries such as education or healthcare, where more women work. This results in more pregnancy claims being filed.
“If delivery complications cause a woman to be out of work for more than six to eight weeks — or if pregnancy complications lead to her leaving work several weeks before delivery,” Schott says, “It increases the likelihood she’ll go beyond the three-month waiting period and she will receive LTD benefits. But the length of LTD pregnancy claims is very short — a few months at most.”
4. Mental health challenges
Mental health is a critical issue in the United States and across the globe. Depression is now the leading cause of disability worldwide according to the World Health Organization. And the National Alliance on Mental Illness shares that 20 percent of American adults will experience a mental illness.
Mental health challenges — including depression and anxiety disorders — account for 9.1 percent of long-term disability claims. The numbers of those who are struggling could be much higher, however, as there is a tendency for depression to go untreated, or to be associated with a physical cause for disability that goes uncounted as a result.
One or two disability carriers measure their causes of disability in a different way than the majority of the industry. They often split up musculoskeletal disorders into a series of separate categories. While there is nothing essentially wrong with this approach, it often pushes mental health out of the top five drivers of absence and disability. This analytic technique further masks the importance of addressing mental health issues in and outside the workplace.
Non-profit organizations in the U.S. and the U.K. are trying to tackle mental health by encouraging people to talk openly about how they are feeling with people they trust. You will often see these efforts in social media attached to #oktosay or #okaytosay.
5. Accidental injuries
Finally, we come to accidental injuries, which ironically enough is what many people assume is the most common cause of disability claims. This category includes injuries such as fractures, sprains and strains of muscles and ligaments and ranks as the fifth most common cause of longer-term absences at nine percent. Preparing to avoid mishaps is difficult — that’s why they’re called accidents! — so it’s important to have disability insurance in place in the event that an accident occurs.
So what should you do with this information?
Disability insurance protects your income if you need to miss work in order to have a baby or recover from everything from back pain, to a broken leg, to treatment for cancer. By knowing the main reasons why people leave work for longer periods of time, it soon becomes clear that illness and injury is far more common than most people realize.
This begs the question: If your pregnancy became unexpectedly complicated, you needed to take time off work to heal from an injury or illness, how would you pay the bills while you recover?
Learn more about how to protect your income at www.RealityCheckup.org