Why Disability Coverage?

The Need for Disability Coverage is Real

When you hear the word "Disability", what comes to your mind? Do you envision your neighbor, your friend, or even your co-worker who sits two desks away? A disability can strike anyone at any time.

The odds for Different Risks Covered By Insurance

  • 1 out of 5 that your auto will be damaged in an accident
  • 1 out of 21 that you will have a disabling accident
  • 1 out of 96 that you will have a fire
  • 1 out of 114 that you will die

Source: The Field Guide to Estate Planning, Business Planning and Employee Benefits, 2003

Are you aware that 1 in 5 people are likely to suffer from a serious disability (lasting for more than 5 years) between the ages of 35 and 65*, or that 1 in 3 workers over age 30 will become disabled for at least 3 months at some point during their careers**? This potential scenario can lead to dramatic financial impacts as well as reduced productivity.
*American Council of Life Insurers (ACLI) 2001 Life Insurers Fact Book
**Disability Survey of Full-Time Employees, America's Health Insurance Plans, August 2004

In 2000, a survey by The Consumer Federation of America and the ACLI found that 82 percent of people do not have long-term disability insurance or believe their coverage is inadequate. Nearly half of all bankruptcies are due to disabling medical conditions, even though 75.7 percent of those affected had medical insurance at the onset of their illness or injury.

What is Group Disability?

Most employees count on their paycheck to pay the bills. A prolonged illness or injury can make it difficult to keep up with the mortgage, car payments, and groceries, and can create stress for the entire family. Group Long Term Disability (LTD) insurance provides a reasonable replacement of monthly earnings to insureds who become disabled for extended periods of time due to sickness or injury.

Benefits of Group Long-Term Disability

  • Provides a source of income in the event of a disability. For many, savings will not last through an extended period of disability and Social Security is not enough.
  • In most cases, affords the opportunity to return to work on a part-time or limited basis without loss of benefits.
  • Provides early intervention opportunities in the event of disability, focusing on a successful return to work as soon as possible.
  • Group income protection insurance offers affordable coverage. The cost of group coverage is usually much lower than a comparable individual disability policy.
  • Disability alternatives are complicated and more restrictive—Social Security benefits are usually less than 60% of pre-disability earnings, have an extremely challenging application process, and around 85% of initial SSD claims denied.
  • Workers' Compensation only covers job-related sickness or injury.