It won't happen to me
Statistics prove otherwise. In a year's time, the chances are one in 96 that you will need your fire insurance
[1]. But over your working life the odds are one in three that you will be disabled by an illness or injury for 90 days
[2]. Many people buy life insurance so that if they die, their families will have a way to pay the mortgage. However, the odds of mortgage foreclosure due to disability are 16 times greater than the risk of foreclosure due to death
[3].
My employee benefits cover disability
Employees mistakenly think workers' compensation and disability income protection insurance are the same, and that disabilities are covered through their medical insurance. While health insurance usually covers medical costs, it does not replace income when an individual is disabled. And about two-thirds of all disabling injuries suffered by American workers occur off the job and are not covered by workers' compensation
[4].
I have enough savings and investments
Nearly one quarter of Americans are living paycheck to paycheck and they have no money left once they have paid their essential living expenses
[5].
Many people fail to realize that savings can be depleted quickly during a disability. In a recent Harvard study on bankruptcy, more than one quarter of survey participants filing bankruptcy cited illness or injury as a specific reason. The study findings suggest that the number of medical bankruptcies increased 23-fold between 1981 and 2001
[6]. This pattern follows personal savings rates which averaged 10.4 percent in the 1980s, but fell to -0.5 percent in 2005. In other words, Americans spent more than they earned, something that has not happened since the Great Depression
[7].
I have Social Security
Social Security Disability Insurance has tough eligibility requirements. And it only pays a benefit for severe disabilities that are expected to last at least 12 months or result in death. In 2004, only 37 out of 100 initial applications for Social Security Disability were approved
[8].
I can't afford it
Disability income protection is one of the less expensive insurance coverages. Can you really afford not to protect your most valuable asset — your income?