Many states require that consumers purchase auto insurance in order to remain on the road. Lenders often demand homeowners insurance before they will offer a mortgage on a home.
However, no one requires individuals to purchase the insurance necessary to protect their own income in the event of injury. This may be among the reasons why 70 percent of Americans working in the private sector do not have long-term disability insurance, according to a recent article by the Pittsburgh Post-Gazette.
“Sufficient disability coverage often takes a back seat to life insurance for several reasons,” says Jonathan Bergman, vice president of Palisades Hudson Financial Group. “The simplest reason is that consumers acknowledge that death is inevitable while long-term disability is not.”
A recent survey by the Life Foundation showed that only one in six working Americans consider their paycheck to be their most valuable asset. They claim that a 25-year-old worker making $50,000 a year could lose $3.8 million in future earnings if they became permanently disabled.
Still, a report by the U.S. Census Bureau showed that almost 20 percent of individuals will suffer a disability before reaching the age of 65. This may force some individuals to change their occupation, the costs of which may be covered in an own-occupation, any-occupation or modified any-occupation policy.
It is important to realize that the chances of becoming unable to work because of an injury are still high. A report by the U.S. Census Bureau showed that almost 20 percent of individuals will suffer a disability before reaching age 65, but it appears American workers are still not a getting the message.
Even though medical costs contribute to 62 percent of all bankruptcies and 50 percent of all home foreclosures in the U.S., Sun Life Financial reported in May 2012 that one-third of full-time workers do not have long-term disability insurance and of those workers who were offered the benefit by their employer more than one-third declined the offer.
