Long term disability insurance: No one thinks they’re ever going to need it—until they do
Written on October 20, 2013 by Kantor and Kantor insurance Matters
It took just 17 days for Cindy Wrenn to realize that her disability insurance premium was not just another drain on her checking account. One-third of American workers are likely to be disabled for an extended period, and she became one of them when she had a stroke and brain aneurysm at age 28.
Long Term Disability insurance has been said to be one of the most overlooked types of insurance, despite its effectiveness in protecting insureds from unexpected illness or accidents. It’s not easy for most of us to think about the possibility of a serious illness or tragic injury – in fact, most of us would like to assume that we are invincible to these types of worries, especially those of younger age.
The unfortunate truth, however, is that disability happens more than we imagine and can have devastating physical, emotional, and financial consequences. The Council for Disability Awareness (CDA) reports that just over one in four of today’s 20 year-olds will become disabled before they retire. Whether you experience a prolonged and complicated journey to diagnosis, or the swift shock of sudden onset, approaching life with disability can force many unexpected challenges.
Why should you care about Long Term Disability Insurance?
- As a working professional, one of your most valuable assets to protect is your job. If disability suddenly strikes, you will become acutely aware of the way it prevents you from living life the way you did before disability, and the way it impedes your ability to earn a living.
- No matter what we think about our chances of becoming disabled, the truth is, we are not immune to disability…even the young and healthy. In fact, 64% of wage earners believe they have a 2% or less chance of being disabled for 3 months or more during their working career. The actual odds for a worker entering the workforce today are about 25%. As we mentioned earlier, just over 1 in 4 of today’s 20 year-olds will become disabled before they retire.
- Disability causes severe financial hardship. You should know that sometimes even those who utilize Long Term Disability Benefits experience significant financial stress. In September 2013, The Consumer Federation of America and Unum released new information on the critical role of disability insurance. This study found that after disability, 85% of respondents said they had to stop saving money for retirement or cut back in other ways, and almost six in 10 said they had to skip or delay some kind of medical, dental or vision care for themselves or family members.
Additionally, almost one in four missed a mortgage or rent payment, and about half said they would have missed a payment if they hadn’t received their disability insurance benefits.
One in three reported seeking community or government assistance to pay for food, with an additional 33% of respondents saying they would have had to do the same if it weren’t for their benefits. Let’s put this into perspective: Think about how long you could afford to be without a paycheck. Are you able to save any of your annual income? 48% of U.S. families don’t.
- Social Security Disability Insurance is not enough. Can your family live on $1,130 a month? That’s the average monthly benefit paid by Social Security Disability Insurance (SSDI) at the end of 2012. Relying on SSDI benefits, to support yourself and your family, after disability could be a harsh reality. Even if $1,130 per month is sufficient for your needs, you should know that 65% of initial SSDI claim applications were denied in 2012. It will likely be a long time before you see any money. That’s why people often opt in to their employer’s Long Term Disability benefits program, which is completely separate from Social Security Disability.
As attorneys that specialize in representing clients who have been denied Long Term Disability benefits, we have experienced countless clients with stories similar to Cindy Wrenn. We have also seen an abundance of individuals who depend upon Long Term Disability benefits to keep them afloat. During an already distressing and demanding time, dealing with the loss of income can exasperate feelings of a loss of self and a loss of normalcy, in addition to aggravating the many symptoms that come along with a newly diagnosed illness.
Sadly, even those who have disability benefits can experience added financial distress from insurance delays and denials. If you or someone you love has been affected by a Long Term Disability insurance denial, please do not hesitate to contact Kantor & Kantor for a no cost consultation.
We understand, and we can help.
www.kantorlaw.net (800) 446-7529