What you don’t know about group disability insurance can hurt you

The 2014 Consumer Disability Awareness Study, which was just published by the Council on Disability Awareness, shows some disturbingly-unrealistic beliefs among people when it comes to the need for disability insurance. There was a stark contrast between workers’ perceptions and reality that show why it has been referred to as the “forgotten insurance.”

Shockingly, over a fifth of people under 40 said that they were more likely to win the lottery than to have an injury or illness that kept them from working. In reality, about a quarter of 20-year-olds will become disabled at some point in their working life, whereas the chances of winning a lottery jackpot are about 1 in 259 million.

Over a quarter of people surveyed said they were more likely to undergo an Internal Revenue Service audit than become disabled. In reality, people have only about a 1 percent chance of an IRS audit.

When asked to list what they considered the most important thing to protect, 82 percent said their health and 78 percent said their home. Just 28 percent listed income.

When people were asked why they didn’t have disability insurance, a third said they couldn’t afford to buy it. Over half said they either had never thought of it or didn’t know enough about it.

So how did people say they planned to support themselves and their families if they were unable to earn a living? Half said they would use savings and investments. However, over half said they had enough funds to get by for just six months or less. In reality, the average disability injury or illness lasts over two years.

According to the CDA, in 2012, over 650,000 workers received long-term-disability benefits totaling over $9 billion from employer-sponsored plans alone. That’s money they didn’t have to take from their nest egg to cover their bills while they were unable to work.

Taking advantage of your employer-sponsored long-term disability insurance plan is a good investment and can truly protect your financial future. That’s why it’s essential that if you need to file a claim, it is accepted. People whose claims are wrongfully denied have options, however. Disability attorneys can help them get the insurance coverage they’ve invested in when they need it.

Source: Insurancenewsnet.com, “Disability Insurance Suffers From Skewed Perceptions” Cyril Tuohy, Dec. 12, 2014