Disability
The odds are not in your favor …
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1. Chances of becoming disabled for
three months or longer before age 65:
(Source: 1985 Commissioners Individual Disability A Table) |
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| 2. Odds of a long-term disability vs. death:
(Source: 1985 Society of Actuaries DTS) |
2.9 to 1 |
3.4 to 1 |
2.5 to 1 |
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| 3. Average duration of a disability over 90 days:
(Source: 1985 Society of Actuaries DTS) |
2.5 years |
3.1 years |
3.1 years |
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Who’s going to pay you if you can’t work?
Personal savings? |
71% of American employees live from paycheck to paycheck, without enough
savings to cushion the financial blow. (American Payroll Association, “Getting Paid in America” Survey, 2008) |
Borrow? |
Banks lend money only to those with the ability to repay. Ability to repay is
usually determined by your income, not your assets. |
Relatives & friends? |
Charity of this kind has its limits. |
Spouse can work? |
Is your spouse working now? If yes, what is your spouse’s income now used for?
If no, who will take over your spouse’s present responsibilities and at what cost?
What if your spouse cannot find a job or gets laid off from work? |
Sell assets? |
Forced sales generally mean reduced value. Will there be a market for the asset?
Do you really want to sell it? |
Social Security? |
To qualify, you must satisfy a five-month waiting period, be unable to do any
job, and have a disability that will likely be at least one year in length or result
in death. |
Worker’s Compensation? |
Only a small fraction – 10% – of disabling accidents and illnesses are work
related. The other 90% are not, meaning Workers Compensation doesn’t
cover them.
(National Safety Council, Injury Facts 2008 Ed.) |
Group Disability Insurance? |
When does your benefit begin? How much do you get and how long does it last?
What if you leave your present employer? |
| None of these sources will guarantee a financially secure future! |
Age and Disability
As you grow older, your chance of suffering from
a disability increases significantly. Note below that
the percentage of the population that is disabled
dramatically increases at approximately age 55.
Source: U.S. Census Bureau, Survey of Income and Program Participation, June-September 2002 ( survey was last conducted in 2002)
Conclusion
These statistics show that over the course of a person’s lifetime, it is not overly uncommon for one to become disabled. What may come as a surprise to many is a majority of the disabilities that people suffer are considered severe disabilities and will
keep them from working completely. As seen in an earlier graph, the onset of a disability is most frequent around the age of 55, but disabilities can occur at any time. Educating yourself on the basics of disabilities is a good place to start to help you reduce your own personal risk of becoming disabled. Please review this Brochure on Individual Disability Income Insurance.
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At Prudent Financial, we guide our clients to systematize a strategy that will identify their financial potential and future results that are measured by their present financial position, their desire to improve, commitment, discipline and consistency in implementation. These elements define the basis for our clients' relative financial success. Please note: our advice is based on facts and realities, we do not dictate to our clients nor are we liable for their failure to implement any of our advice.
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