Most people are aware that their financial and general livelihood are dependent on their ability to work. Many of these same people carry insurance policies that cover things like their health or home in the event of an accident or sickness, but do not have a plan in place in the event that they become too sick or injured to work. This is especially troubling and surprising, considering that an estimated one in four people will face disability of some kind by the age of 67. Why then, do so few people carry disability policies?
1. People Are Counting On Government Programs Like Social Security: While it’s true that there are government programs such as Social Security in place for those who have been injured and are out of work, the reality is that very strict provisions have been placed upon benefits awarded by Social Security. These provisions explicitly state that benefits are not to be paid for short term disability or awarded to anyone who is deemed capable of procuring employment of any other kind.
2. The Typical Time Spent Disabled is Underestimated: Many people may simply not consider the possibility that they may become unable to work. Even in scenarios where a person anticipates that injury could be a possibility, they may believe that they will only be out of work for a few months and save accordingly. In fact, however, the average length of time that a disabled person is unemployed is as long as two and a half years.
3. Benefits Offered By Employers Are Not Taken Advantage Of: Many employers offer their employees disability insurance, and some even provide options for disability coverage. In some cases, employers provide the option of group coverage, which reduces out of pocket costs for employees. Many people may not do the necessary research on their benefits to assess whether the coverage provided by their employer is adequate.
4. High Earners Are Self Employed: Many of the people most affected by becoming disabled are those with a specific skill that earns them a sizable salary. In the event of a brain injury or other catastrophic event, these people are highly unlikely to be able to find work that affords them the salary that they earned while healthy. These same people, who may be the heads of firms or work on freelance contracts, are less likely to carry disability insurance because it is not provided to them through an employer.
5. Disability Insurance Is Not Used: In Day to Day Life Unlike other types of insurance, such as health insurance or car insurance, disability insurance is only needed in the event that an unfortunate incident occurs. Most people carry health insurance because they know they will need to visit the doctor at some point, and have car insurance because, among other reasons, it is mandated by the law in many states. Choosing to budget money for disability insurance may not seem as important, because most people do not think about the chances of themselves becoming disabled in their day to day life.
Jefffrey R. Lamb, an Associate Lawyer at Martin Stanley Law, is a devoted husband to his wife and in his off time donates his time speaking about Education and the Law.