A disabling injury occurs every second.¹  Yet most of us dismiss the idea that we might become disabled.  Obviously, we grossly underestimate the potential for a major injury or illness.  As a result, we aren’t preparing adequately for the possibility.

Let’s look at the facts: The top financial concern among U.S. workers is having enough money to pay bills in case of sudden income loss.²  The greatest cause of sudden income loss is a disabling injury or illness.  Yet only 30% of Americans carry long-term disability insurance.³

Why do we fail to purchase the very product that would protect us against our greatest fear?

Many people don’t believe disability is a serious threat to their ability to earn a living.  And with all of our day-to-day expenses, disability insurance just doesn’t make it to the top of our priority list.  Perhaps we need to examine the misconceptions that lead to this belief.

Misconception #1:  “I’m young.  I’m healthy.  I don’t need to worry about disability.”

According to statistics, disability is a real possibility:

• One-third of Americans between age 35 and 65 will become disabled for some period of time.⁴ 
• Men have a 43% chance of becoming seriously disabled during their working years.  For women, the risk is even higher at 54%.⁵
• Leading causes of long-term disability are cancer, complications of pregnancy, back injuries and other injuries. For short-term disability, the leading factors are pregnancy, general injuries, digestive/intestinal diseases and back injuries.⁶

Misconception #2:  “In case of injury, I’d only miss work for a short time.”

That’s not necessarily the case. On average, if a disability lasts longer than 90 days, the duration will be:

Misconception #3:  “Most disabilities result from work-related injuries.  My health insurance or workers’ comp will cover it.”

• Fewer than 10% of disabling accidents and illnesses are work related.⁷
• Workers’ compensation only relates to job-related injuries and diseases.
• Health insurance only covers medical expenses, not lost income.
• Only disability insurance covers loss of income due to injury or illness.

Misconception #4:  “Social Security Disability Insurance has me covered. I don’t need anything else.”

• It could take months, or even years, to go through the administrative process required to become approved to receive Social Security Disability Insurance (SSDI) benefits.⁸
• Fewer than half of the 2.1 million workers who applied for SSDI benefits in 2005 were approved.³ 
• Social Security considers you disabled only if your disability is expected to last for at least one year or result in death.⁹  
• The typical SSDI benefit — $978 monthly or $11,736 a year — won’t cover the average family’s monthly expenses.³

Misconception #5: “I’ll just rely on my savings to make ends meet if anything happens.”

Most Americans are not financially prepared for the loss of income a disabling event will cause.  Take a look at these statistics:

• 66% of working adults do not have enough savings to survive for three months if a primary wage-earner loses his/her income due to a disability.¹⁰ 
• 66% of American families live from paycheck to paycheck.¹¹
• 44% of American families spend more than they earn.¹²
• 48% of all bankruptcies and mortgage foreclosures are caused by medical disabilities.¹³

Disability insurance isn’t offered simply to provide peace of mind. It is a key component of a strong financial plan.  In fact, financial planners agree that disability insurance is one of the most important ways to protect your financial well-being.