Why Disability Insurance? Because Your Chances Of Becoming Disabled Are Greater Than Your Chances Of Dying.


 Why Disability Insurance? Because Your Chances Of Becoming Disabled Are Greater Than Your Chances Of Dying.

With the emergence of a new generation of Americans, disabilities have become more commonplace and society is becoming increasingly aware. As such, there has been a growing need for disability insurance which protects people against potential disability. Disability insurance is like life insurance in that it protects people from the risk of being left with no income if they became unable to work due to injury or illness.

The growth of disability insurance in the United States has not been as rapid or as widespread as that of life insurance, and it is not likely to be. Disability rates are simply higher than mortality rates. People are more likely to become disabled than they are to die, and have a better chance at becoming chronically disabled than they do at dying from a terminal illness. The leading cause of disability is the same in both cases.

According to 2000 census data, one third of Americans will suffer a physical or mental impairment before the age of 65. For the elderly, this is a slight decrease from one half in 1990. For those between the ages of 50 and 64, it is expected to rise.

A 1996 Harvard University study found that one person in four will become disabled before they turn 65 (an average of two people per household). Of those who become disabled before they turn 65, 10% will go on to develop serious chronic conditions such as diabetes or heart disease.

Many people believe that their chances of becoming disabled are lower than their chances of dying, but this is far from being correct. For those living in developed countries, their odds of becoming disabled are far greater than their odds of dying. Although the majority of Americans believe they have a greater chance at becoming disabled than they do at dying, this is not the case. According to the World Health Organization, in developed countries, an individual's odds of becoming disabled are two to three times higher than their odds of dying. The likelihood of becoming chronically disabled in America has been calculated to be 1 in 5 prior to age 60.

Insurance companies have found that individuals are more likely to purchase life insurance than disability insurance, and this is because death is seen as a certain event whereas disability is seen as more uncertain and less likely to occur. The majority of Americans are not aware of the fact that they have a higher chance at becoming disabled than at dying.

When dealing with disability insurance, it is important to understand that disability protection is more difficult to find and more costly than life insurance. It is relatively easy to purchase life insurance because the coverage amounts or premiums are set by the insurer, but there are several different choices for those looking for disability protection. The major risk factors for disability include age, gender, occupation and health. For those who are healthy and working in low-risk occupations, purchasing coverage can be difficult and expensive. For those in high-risk occupations or lifestyles it can be both difficult and expensive to obtain coverage.

One of the major factors people consider when purchasing disability insurance is term life insurance. The costs that are involved in purchasing term life insurance are relatively small and cheap, making it less expensive to buy than disability insurance. In a similar way, it takes more time to obtain disability coverage than it does to obtain term life coverage. Because of this, the majority of Americans opt for short-term disability coverage rather than long-term disability coverage.

For those who believe they may have a future increase in their risk of becoming disabled, they should take into consideration purchasing a whole life policy or variable universal life policy. Whole life policies and variable universal life policies are less expensive in the long run than term life insurance, but they are considerably more expensive than short-term or long-term disability insurance.

There are several different types of disability coverage including permanent, Medicare supplement, temporary and short-term. Each has its own unique requirements to be considered as well as its own different level of benefit. It is important to look into what each type of coverage will provide and which type of benefits are included in each type of coverage.

Some entities offer disability insurance through public programs such as Social Security Disability Insurance (SSDI). The eligibility requirements for SSDI vary by state but generally require a minimum age at which a person can be eligible for SSDI. For example, in most states if a person becomes disabled before the age of 40, they can be eligible for SSDI benefits.

Another way for people to find coverage is through their employer. If an employer offers disability coverage it is important to understand what the employer's guidelines are and how long it will take for the individual to become qualified for the coverage. There are several options that an employer can choose from when offering their employee's disability insurance; the most common being Blue Cross/Blue Shield as well as several other large insurers in private markets.

The last option is to sell an annuity or life insurance policy that has a death benefit equal to or greater than one's projected future disability income loss. This is also referred to as being "protected against the unknown". (See: Whole life insurance).

The National Association of Insurance Commissioners, or NAIC, was created in 1871 to protect the consumers of United States insurance industry. Each state has a department of insurance that regulates the insurance companies within its borders. The NAIC publishes model laws and regulations that are meant to protect consumers and promote an efficient marketplace.

There are many types of disability policies available throughout various markets, including short-term disability policies, term life policies and whole life policy. Short-term disability policies can provide a higher return when compared to term life insurance due to the high cost of a whole life policy. Variable universal life policy are less expensive then term life insurance, but are considerably more expensive than short-term disability policies.

The minimum policy term most disability policies are one year and the maximum duration is ten years. The policy is renewable after the first period ends and can be extended, however, only if there have no gaps of at least one day in coverage or if there has been a long-term disability of at least one full year followed by a return to work training for at least six months before reinstatement on the same job. If someone becomes disabled after exceeding a ten-year maximum duration, they can renew their policy for a lesser benefit period, but cannot extend the duration beyond what is stated in their policy.


Disability insurance can be purchased through any number of sources. To understand the full extent of disability coverage, it is important to research the policy thoroughly and purchase the most appropriate coverage for your situation.

About the Author:

Vanessa is a quality assurance specialist for Maciels, Inc. She has been in insurance since 2000 and has worked in a variety of positions, each with her own unique set of duties and responsibilities. Vanessa enjoys working with her clients and tailoring her plan to fit their specific needs. She considers working with her clients as an invaluable experience and loves helping them navigate through the numerous options available.

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