According to MetLife, more than 80 percent of working Americans do not have adequate disability coverage or no coverage at all.
There are many different theories as to why so many working individuals do not own disability insurance, which offers protection if the employee is injured or becomes ill and cannot return to work. Many people believe that they do not need disability insurance. If someone were to become disabled, his or her assets can become at risk as income drops dramatically. Studies have shown that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age.
A common belief exists among workers that Social Security will provide the necessary income in case of a disability. Unfortunately, Social Security does not pay for partial disability or short-term disability. The Social Security Administration defines a disability as an inability to work. That means that if a person can work in any capacity, even if that person can longer perform the job in which he or she was trained, the chances of receiving Social Security benefits are slim.
Some workers feel that if they cannot work for any length of time, they can just tap into their savings. Most people only have enough saved to cover emergencies, such as car repairs, a broken air conditioner, temporary unemployment and so on. Financial experts usually recommend setting aside 3 to 6 months of living expenses. Even if a worker is able to save that amount, if the disability lasts longer than that time period, there is a strong potential of financial disaster.
Employers often provide group long-term disability insurance, which generally pays benefits equal to approximately 50 to 66 2/3 percent of the worker’s salary. For some families, this amount is not enough and further coverage may be needed.
The article posted on American Chronicle’s website recommends that workers look into private disability insurance as an addition to their financial plans.