A long-term disability can have a devastating impact on a family’s finances. When you become sick or injured and cannot work, you could lose your income and all your savings, investments, and other assets. Without a steady income, you’d eventually have to tap into these assets to pay for your costly medical bills, mortgage, utilities, and other daily expenses.
Luckily, disability income (DI) can offer your family much-needed financial protection. But if you’re young and healthy or your spouse works, you probably assume you do not need disability income, and you couldn’t be more wrong.
Here are five of the most common disability income myths disproved:
Myth #1: I’m too young to buy DI insurance.
You would be surprised to learn how many young adults suffer from long-term disabilities. According to the Social Security Administration, nearly 3 in 10 of today’s 20-year-olds will become disabled before age 67. On top of that, according to a study by Great-West Life, you are five times more likely to become injured during your working years than to die before age 65.
In other words, you are never too young to suffer from a long-term disability-which means you’re never too young to purchase disability income insurance.
Myth #2: I don’t need DI because I’m healthy as a horse.
As we all know, good health can come and go like lightning. People who eat well, exercise, and take great care of themselves can suffer from a stroke, cancer, neurological disorder, or an unexpected accident.
Myth #3: Only people with high-risk jobs need DI coverage.
Far too many people are under the impression that disability income is most often paid out to blue-collar workers injured in a workplace or professionals who are disabled in a car accident. Therefore, people who work from home or at a computer desk in a comfy office assume they don’t need DI coverage.
The truth is that non-work-related accidents or Jobsite injuries are not the primary causes of worker disabilities. Most workers are disabled by a chronic disease, such as cancer or musculoskeletal problems-conditions that can strike anyone, anywhere, at any time.*
Myth #4: If I were disabled, my spouse’s income would cover us.
If your spouse works, you may assume their income would be enough to pay the bills for a few months if you were sick or disabled. If your spouse doesn’t work, you may think they could find a job if something happened to you.
However, don’t you think if you were diagnosed with a disease or seriously injured, your spouse would instead be caring for you than running out to find a job or working overtime to pay the bills? Typically, if a family has DI insurance, both the injured worker and the spouse end up living off of the insurance benefit-even if the spouse was working previously.
Myth #5: I don’t need DI insurance because I’m covered through my company’s group policy.
Although many workers receive disability coverage through their companies, it may not be enough. Most group DI insurance contracts will cover only a percentage of your salary (usually about 50-60%), and the benefits are generally fully taxable. Would your family be able to live off of just 60% of your salary, especially considering that you may be facing some high medical bills? Probably not.
Most financial experts recommend that you go ahead and take advantage of your company’s group coverage if they offer it, but also buy individual coverage to fill in the salary gaps.
As you can see, everyone stands to benefit from long-term disability coverage. Without coverage, an unexpected disability could end up crushing your family’s finances.