Why Disability Insurance Is So Important
When you have a disability of any type, your time, energy, and emotions are all heightened as you begin the journey to learn all you can so that you can regain the best quality of life that you can, given your particular circumstances. And, if you are married, and/or if you have children, trying to communicate with them what is going on with you, as well as to your doctors, becomes a difficult chore also. With all of this chaos in your life, the absolute last thing that you need to worry about is money! What if I can’t work any longer? How will the bills be paid? Perhaps you are saying that you do not need any disability insurance. Consider the following. Disability Statistics The odds of a person having at least one long term disability (LTD) that lasts three months or longer before that person reaches age 65. DISABLED: (1999) According to the Disability Management Sourcebook, the number of folks between 17 and 44 with severe disabilities has increased 400 percent over the past 25 years.
One in seven people will become disabled for five years or more before they reach 65. ODDS, STATISTICS AND DISABILITIES: (1999) The chances of using your homeowners insurance are about 1 in 88. The odds of using your auto insurance at about 1 in 47. The chances of using your LTC insurance is about 2 in 5. One out of two women and one out of three men will spend some time in a nursing home.
(Journal of the American Society of CLU, 1996) More than 12 million older Americans will require some form of long term care by 2020. (Health Insurance Association of America). 72% of residents in a nursing home are women 90% of nursing home residents are over the age of 65. 22% of the disabled population is under age 65. (Puget Sound Life Underwriters Journal 1996). Functionally disabled people between the ages of 18 and 64 represent 40% of Americans needing long term care services. (Life Insurance Selling 1995) The likelihood of needing LTC (obviously) increases with age. In 1991, 29.2% if those age 45- 64 had a disability; 44.6% between 65 and 74 had a disability; 63.
7% between the ages of 75 to 84. 15.3% and 41.5% respectively had a severe disability. (Employee Benefit Research Institute, 1995) 80% of disabled persons are cared for at home or in adult day care centers. 72% of caregivers are family or friends. (Puget Sound Underwriters Journal). The cost of home care can run from $4.25 to over $200 daily depending on the level of skill needed (SF Chronicle, 1995). Caring for each Alzheimers patient will cost more than $213,000- on top of other medical expenses- over the remaining five years of their lives.
(American Journal of Public Health, 1994). Over 99% of nursing home care is either custodial or intermediate care, not skilled care, and is not covered by Medicare or Medicare supplements (Journal of the American Society of CLU's, 1996). Reasons People Take STD and LTD Leading the list of Top 5 causes of short-term disability (STD) workplace absence for 2001 was pregnancy (normal), followed by complications from pregnancy, injuries (excluding back), back conditions and digestive/intestinal conditions. The causes of claims and the percentage received for each cause were as follows: LTD - 13 percent – Cancer, 12 percent – Complications from Pregnancy, 11 percent – Back, 9 percent – Cardiovascular, 5 percent – Depression (2003) every year 12% of the adult U. population suffers a long-term disability. One out of every seven workers will suffer a five-year or longer period of disability before age 65, and if you’re 35 now, your chances of experiencing a three-month or longer disability before you reach age 65 are 50%. If you’re 45, the figure is 44% STD - 20 percent – Pregnancy (Normal), 9 percent – Pregnancy (Complications), 9 percent – Injuries (Excluding Back), 8 percent – Back, 8 percent – Digestive/Intestinal The primary sources of disability insurance are STD and LTD. It is important to see if your company offers these insurances. If they do, make sure that you are covered.
If they don’t, you can get personal STD and LTD. By visiting the following website, you can get more information about disability insurances. How Much Disability Insurance is "Enough"? Research shows the following about employer-offered STD (short term disability) and LTD (long term disability). Disability Insurance: ( 2003) In small private firms, fewer than one-quarter of workers have short-term disability coverage (22%), and just 13 percent have long-term disability income insurance, according to the Bureau of Labor Statistics. Half of workers at large employers (100 or more employees) have short-term disability income insurance (47%), and more than one-third have long-term disability coverage (40%). Disability coverage (American Council of Insurers 2004) 82% of employees are lacking in adequate coverage. The Society of Actuaries says that only 2.5% of employees have individual disability coverage (i.