“I tell my clients that your income is your biggest asset. I have yet to have a client where that isn’t the case,” Moore said. While on chemo, Moore wasn’t able to work full time, but the disability insurance helped her make up some of her lost income through partial payments.
About 70% of Americans do not have enough savings to meet short-term emergencies, according to a survey by A.G. Edwards. The Council for Disability Awareness noted in 2007 that about half of all home foreclosures were the result of someone unable to work because of an unexpected disability, while just 2% of foreclosures followed a death.
Disability insurance protects you by providing replacement income if you can’t work due to an injury or illness. It’s a tough sell, said Matt Tassey, past chairman at the Life and Health Insurance Foundation for Education and an insurance broker with Burwell & Burwell in Portland, Maine.
“People don’t think about it,” Tassey said. “They think they are covered somewhere else, through workers’ compensation, through Social Security, through their employer. They don’t think it will happen to them.”
Myth No. 3:
Workers’ Comp Would Pay Me
Many people don’t purchase disability insurance because they think workers’ compensation would cover them.
Most states require employers to purchase workers’ compensation coverage for their employees. This would pay for your medical bills and a portion of your lost wages if you were hurt, but only if you were injured on the job.
However, more than 90% of disabling accidents and illnesses are not work-related. That means 90% of people out of work for an injury or illness can not collect workers’ comp.
Filbert A. Bucci, 63, is a good example. Bucci is in charge of the distribution center for the Pittsburgh Post-Gazette in Pittsburgh. He tries to take care of himself. “I cook broccoli. I exercise,” Bucci said.
Supplement Disability Insurance: An option to buy additional coverage in addition to coverage that your employer provides.
Social Security Disability Income: The federal government will pay up to about a $1,000 a month to a disabled person. About 60% of people who apply for SSDI are denied, and it can take months to begin to receive payments.
Workers’ Compensation: State-mandated insurance that employers provide to pay the medical bills and lost wages of injured workers. Workers must be injured on the job to qualify. However, more than 90% of disabling accidents and illnesses are not work-related.
Extent of Disability: Some policies will only pay you if you are totally disabled and unable to work. Others will pay a partial disability if you’re able to work part time.