Did you know that approximately every seven seconds, a working age American suffers a disabling injury or illness that will last for at least a month? Or that a 20-year-old entering the workforce today has a 1 in 4 chance of suffering some type of income-interrupting disability during their working career? Over 37 million Americans are classified as disabled, or about 12 percent of the population, and more than 50 percent of the disabled are in their working years, between ages 18 and 64.
It happens more often than most people think, and most working Americans underestimate their risk.
The fact is, there’s a huge disconnect between reality and most people’s perceptions about disability. According to the CDA study, most working Americans believe their chances of experiencing a long-term disability are substantially lower than the average worker’s. It’s the classic case of believing “it can’t happen to me.” Many actually believe they’re more likely to get audited by the IRS, win millions in a sweepstakes, get hit by lightning and even become President of the United States than they are to become disabled!
It’s easy to underestimate the risks if you don’t understand the causes.
Another misconception is that most disabilities are caused by serious accidents. But in fact, about 90 percent of disabilities are caused by illnesses such as:
- Cardiovascular/circulatory disorders
- Musculoskeletal/connective tissue disorders
- Mental disorders
Disability can quickly lead to severe financial hardship.
When your income stops, the bills keep coming in. But few adults have the financial resources to stay afloat without income protection. Forty-eight percent of U.S. families don’t save any of their annual income, and 65 percent of working Americans couldn’t cover normal living expenses even for a year if they lost their paycheck; 38 percent couldn’t pay their bills for more than three months. That’s why disabilities lead to so many personal bankruptcies and nearly 50 percent of all home foreclosures.
Another potentially costly misperception? Thinking Social Security Disability Insurance or workers' compensation will cover any loss of income. But a large percentage of SSDI applications are denied, and the benefit isn’t enough to support your home and family even if you get it. And less than 5 percent of disabling accidents and illnesses are work related, so workers’ compensation doesn’t cover 95 percent of disabilities.
How many of your employees are financially prepared to have their paycheck suddenly stop coming in because of a disabling injury or illness?
Most wage earners see their ability to earn an income as vital to achieving their long-term financial security, even more valuable than retirement savings, medical insurance, personal possessions. In the CDA study, 67 percent of adults picked income as one of the top three most important things in their life. But only 28 percent think it’s crucial to have insurance to protect that income, and fewer than half have even discussed it. That means millions of American workers are rolling the dice, and it’s largely due to misconceptions.
Give your employees a leg up
Employees today are increasingly struggling with financial pressures such as credit card and student loan debt, medical expenses, their children’s education, and saving for retirement. And those pressures are having a negative impact in the workplace.
You’re in a unique position to help. Are you offering any type of financial education? How about disability insurance as part of your voluntary benefits offerings? Give us a call at Higginbotham. Let’s celebrate DI Awareness Month by helping your employees protect their most vital asset. And, if you haven’t yet protected your own income, let’s talk about that too! We can help with key person DI, business overhead expensive, executive benefits and more.