The possibility of becoming disabled is very real for working Americans, and so are the financial consequences and costs associated with employee absence. Studies show that working-age adults are more likely to suffer from lengthy disabilities in any given year than they are to die. Unless it is offered through their employer, most adults have little, if any, disability insurance coverage.
Disability insurance is often one of the benefits that employees take for granted. Because of that, as annual benefit enrollment time approaches employees aren’t worried about examining the disability benefits available, but they should.
One of the main reasons employees overlook disability insurance is because they don’t think they’ll need it. Let’s review some of the most problematic myths related to disability insurance.
Myth: I’ll never need it or I’m too young
The chances of a disability are higher than people think. The Social Security Administration reports that one in four of today’s 20 year-olds will become disabled before reaching age 67. In addition, Unum reported that 41 percent of long-term disability recipients were younger than 50 and a third were younger than 40.
Myth: Most disabilities are from serious accidents or injuries
Only 9 percent of long-term disability cases are caused by accidents. The truth is illnesses are the leading causes of disability. Approximately 90 percent of disabilities are due to chronic conditions, such as back or joint pain, or cancer, diabetes and heart disease.
Myth: Disability payments can’t be taxed
It is true that many types of disability insurance can be non-taxable; however, there is no “across the board” exemption for disability.
Myth: Social Security or Workers Compensation will cover my disability
Social Security benefits cannot be collected until the end of the fifth full month of disability – and only if you’re expected to be out of work for 12 or more months. It’s also difficult to get approved for Social Security disability benefits. In 2015, only 32 percent of workers who applied for Social Security benefits were approved.
Workers Compensation pays a benefit only if an accident or illness occurs on the job. Fewer than 5 percent of disability accidents and illness are work related.
Most Americans are financially unprepared for a disability, which lasts 34.6 months on average. And most underestimate their risk for a disability. Disability benefits along with relevant and meaningful education will help employees better prepare for the unexpected.
Get more facts at: www.disabilitycanhappen.org/docs/disability_stats.pdf