Why You Don’t Need Disability Insurance

We’ve heard all the reasons you don’t need disability insurance. After all, we’re talking about an additional monthly expenditure in the form of a premium. People can come up with plenty of excuses for not spending money, especially when it comes to spending money on something that many see as a “worst-case-scenario.”

We’ve outlined a few reasons people say they don’t need disability insurance … and then of course we’ve done some good, old-fashioned myth-busting.

I Won’t Need Disability Insurance

If you’re lucky, you may not need disability insurance. However, in an article in Forbes titled “5 Myths About Disability Insurance,” Ashlea Ebeling wrote, “The Social Security Administration estimates that one in four 20-year-olds will become disabled and unable to work before they reach the age of 67. In 2012, more than 650,000 disabled workers received more than $9 billion in long-term disability benefits through employer-sponsored group disability coverage.”

The chances of becoming disabled are not as slim as people think. We call this the disability disconnect.

Workers’ Compensation Will Likely Cover Me if I Become Disabled

There are actually two misunderstandings at work in this myth. First of all, most disabling accidents don’t occur on the job. According to Ebeling, “fewer than 5 percent of disabling accidents and illnesses are work-related.”

Beyond that, many workers who are injured on the job increasingly find that Worker’s Compensation comes up painfully short. A recent NPR and Pro-Publica exploration of Workers Compensation reforms, called The Demolition of Workers’ Comp, dug into how many workers are finding themselves saddled with crippling debt even as they lose their income due to an on-the-job disability.

“Over the past decade, state after state has been dismantling America’s workers’ comp system with disastrous consequences for many of the hundreds of thousands of people who suffer serious injuries at work each year,” they reported.

Counting on worker’s comp to protect your income is just not a good idea.

Social Security Will Cover Me if I Become Disabled

We’ll quote directly from the Social Security Administration’s website: “The definition of disability under Social Security is different than other programs. Social Security pays only for total disability. No benefits are payable for partial disability or for short-term disability.” The emphasis is theirs.

Disability for social security means you cannot work in any capacity and that your disability has lasted or will last for at least one year. There are several other requirements, as well—and even if you qualify for Social Security disability benefits, the process of approval can be very long. Even then, Social Security benefits are fairly limited (you can calculate estimated Social Security benefits here).

I Am Not at Risk of Disability, My Job/Life Isn’t Physically Challenging

Most disability claims are not the result of marathon running, skydiving, or workplace injuries. The majority of disability claims are caused by illnesses. Illnesses such as arthritis, cancer, cardiovascular disease, mental disorders, and nervous system illnesses such as Alzheimer’s and Parkinson’s disease. You certainly know people with a wide variety of lifestyles who have been afflicted with these diseases.

I Could Get By Financially Without Disability Insurance

We think Steven Johnson of LifeHealthPro said it well in his article 4 myths about disability insurance, busted: “Less than 40 percent of adults in a 2014 Bankrate survey said they would have enough on-hand in a savings or checking account to pay for a $1,000 emergency room visit or car repair. So where’s the money going to come from?”

Fortunately, you can financially prepare for the possibility of disability. But the first step is realizing there’s no good excuse for not seeking out disability insurance. Find out if your employer offers disability insurance, and if they don’t, seek the help of a CDA member company; it could buy you some real peace of mind.

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