In a blink of an eye, our lives could change. Often, change can be joyous and welcomed, as would be the case with the birth of a child or a job promotion. Life changes aren’t always a welcomed occurrence, however. An illness or injury could leave us unable to work or enjoy our normal lifestyle.
Per a 2014 study conducted by the Council for Disability Awareness, one in four 20-year-olds entering the workforce will suffer some income-interrupting disability during their working career. An income is a person’s most important financial resource. It pays the bills and makes financial security possible. It needs protection.
Social Security Disability Insurance (SSDI) benefits will cover all your financial needs, right? Wrong. Nearly nine million adults received these benefits in 2014. Unfortunately, SSDI only provides for very basic income protection, and most adults do not have additional private disability insurance in which to turn to.
Many working adults believe that Workers’ Compensation would cover them if they become disabled; however, only 5 percent of disabling accidents and illness are work related. The other 95 percent are not, meaning Workers’ Compensation won’t cover them. The most common causes of existing disability claims in 2012 were:
- Musculoskeletal/connective tissue disorders (30.7 percent)
- Disorders of the nervous system and sense organs (14.2 percent)
- Cardiovascular/circulatory disorders (12.1 percent)
- Cancer (9 percent)
- Mental disorders (7.7 percent)
How would you pay your bills without an income? In the same 2014 CDA study mentioned above, most adults said savings and investments would be their number-one resource in case of a disability; however, according to the Federal Reserve and the U.S. Census Bureau, only 38 percent have an emergency fund to fall back on, but with most only having enough funds to last up to 3 months. Forty-eight percent of U.S. families do not save any of their annual income.
Becoming disabled will never happen to me, right? One in four would be wrong. Per disabilitycanhappen.org, 64 percent of wage earners believe they have a two percent or less chance of being disabled for three months or more during their working careers. The actual odds for a worker entering the workforce today are about 25 percent.
Income protection, or disability insurance, should be something every working adult should consider, and worth a few moments of your time to sit down with your insurance agent to see what is right for your personal situation.
Do not wait until it’s too late. Ensure you have the appropriate amount of disability income insurance so you, your family, and your paycheck are protected when you need it most. Contact a STAR Insurance Life and Health Specialist today at 1-800-321-9633 to get started.
Nick Mehdikhan is the Vice President and Director of STAR Insurance Agency, Benefits Division. He began his career with STAR in 2005, and is now responsible for marketing, sales, and strategic planning for STAR Insurance Agency. A life-long resident of Fort Wayne, he graduated Magna Cum Laude in 2013 with a Master’s in Business Administration from Taylor University.