Why Should I Buy Disability Insurance?

Free Insurance Quote Comparison

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Why buy disability insurance? Millions of Americans are disabled an unable to work each year, and rely on disability insurance income to keep their head above water until they are able to work again. Disability insurance income can take care of your mortgage, utilities, and other monthly expenses while you are recovering from your disability. Because life is unpredictable, and disabilities are not uncommon, it is critical to have disability insurance income to support you and your family in an emergency.

TIP: You cannot guarantee that you won’t be injured and unable to work. With income from disability insurance, you can guarantee that you’ll be financially supported if you are disabled.

The Need for Disability Insurance

You need disability insurance because disabilities are not uncommon. According to the Council for Disability Awareness (CDA), a typical female, age 35, 5’4″, 125 pounds, non-smoker, who works mostly an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:

 

  • A 24% chance of becoming disabled for 3 months or longer during her working career
  • A 38% chance that the disability would last 5 years or longer
  • If this same person used tobacco and weighed 160 pounds, the risk would increase to a 41% chance of becoming disabled for 3 months or longer.

 

About the same is true for a male. A man, age 35, 5’10”, 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:

 

  • 21% chance of becoming disabled for 3 months or longer during his working career with a 38% chance that the disability would last 5 years or longer.
  • If this same person used tobacco and weighed 210 pounds, the risk would increase to a 45% chance of becoming disabled for 3 months or longer.

 

Your need for disability insurance can be even greater depending on your lifestyle. The CDA found that the risk of disability increased with alcohol and tobacco use, excessive weight, high risk activities or behaviors, and anxiety or depression. If an average American worker has a 21 – 25% chance of becoming disabled for 3 or more months, every employee has a need for disability insurance.

Why Buy Disability Insurance?

Disabilities, both physical and mental, keep millions of Americans out of work and in poverty. A big reason why you should buy disability insurance is the impact it has on your ability to work.

 

  • There are over 36 million Americans now classified as disabled, including 13.5 million Americans with cognitive disabilities.
  • 21% of those disabled (age 16 and older) are living below the poverty level. This is compared to 11% of the same age group without a disability living below the poverty level.
  • 72% of disabled people (16 and older) are unable to work and therefore are not in the labor force. This is compared to 27% in the same age group without a disability who are not in the labor force.

 

Sustaining a disability makes it significantly more likely that you will be out of work and at risk of living in poverty. Not having disability insurance income will mean that you face all of your regular bills, plus the disability costs, without any source of money. While you may be able to survive on savings for a short period of time, disability insurance income will sustain you more comfortably and be there in the event your disability keeps you out of the work force longer than expected.

Potential Loss of Retirement Savings Resulting from a Long Term Disability

A disability not only threatens your current financial security, but also your future retirement savings due to the inability to earn an income. The following chart from the U.S. Census Bureau (2003) shows the potential impact of a long term disability on retirement savings. It is based on the average amount of retirement savings typically put aside by an employee and his employer for that employee, assuming three different income levels at the time disability begins.

Income Level at Time of Disability Amount of Potential Loss of Retirement Savings
$25,000 $225,000
$50,000 $475,000
$100,000 $900,000

In each of these scenarios, about one-third of the funding for the lost retirement benefit would have come from the employer and the remaining two-thirds from the employee. This loss only escalates with the passing of years due to the loss in potential salary increases and the loss of higher positions that could have been obtained if it were not for being disabled

Why buy disability insurance? Because the risk of disability is higher than you think, and the consequences of the loss of income can be devastating for your immediate and future financial needs. To get a free quote on a disability insurance income policy that will protect you in the event you ever become disabled, click here to visit the Free Advice quote center today.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

 Secured with SHA-256 Encryption