Six Myths of Disability Insurance

Myth # 1: It won’t happen to me

People certainly hope it won’t happen to them, but do they really understand the odds? Research from the Council for Disability Awareness (CDA) found that while about 30 percent of employees will face a long-term disability during their working career, 73 percent of workers think their odds are 10 percent or lower, and 32 percent estimate their chances of disability at 2 percent or lower.

Myth #2: If I become disabled, it won’t last long

It’s true that most work absences are short, and people get back to work in a few days. But three in 10 workers will miss work during their careers for three months or more as a result of accident or illness, and when that happens, they can expect that disability to last an average of two-and-a-half years.

Myth #3: I’m covered at work

Many employers, especially the smaller-sized ones, don’t provide sick pay or long-term disability benefits for their employees. According to the Social Security Administration, 69 percent of workers have no private disability insurance. Surprisingly, many workers who are not covered at work think that they are. We encourage clients to learn about their benefits, and help them understand whether they have enough protection to pay their bills should a disability strike.

Myth #4: Workers’ comp should cover me

CDA’s research shows that 95 percent of disability claims are not work-related. The top three causes of long-term disability — heart disease, cancer, and musculoskeletal disease — are usually not work-related, and therefore not eligible for workers’ comp.

Myth #5: Social Security should be enough

Although Social Security Disability Insurance (SSDI) is important for more than 150 million U.S. workers, it is difficult to qualify for — half of all initial SSDI claim filings are denied — and the average monthly benefit is only $1,062.

Myth #6: I have enough to live on . . . if I’m ever disabled

Seventy-one percent of American employees live from paycheck to paycheck without enough savings to cushion a financial blow. Many nest eggs were severely depleted by the most recent stock market crash, and many Americans carry too much debt.