Disability Insurance
Long Term Disability – What is the risk?
The risk of long-term disability is increasing. Many factors have combined to allow us to live longer lives which in turn leaves us more vulnerable to long-term disabilities. Medical technology has improved significantly – heart bypass surgery, angioplasty, transplant surgery, many forms of cancer treatment. It is important to understand the disability signs of the times.
Between the ages of 35 and 65 nearly 1 in 5 people will become disabled for 5 years or more! New causes of disability include carpel tunnel syndrome, chronic fatigue syndrome, Epstein Bar virus and HIV/AIDS. Add to that the fact that 10 percent of new claims today come from some form of psychiatric disorder and nearly half of long-term disability claims are caused by a psychiatric disorder.
The risk of disability is greater than the risk of death at all ages between 20 and 65. People buy life insurance because death is inevitable, but disability is only a possibility. In the time it took to read this far, three people died and two of them had sufficient life insurance to cover their needs; approximately 104 people became disabled and 76 of them have no disability coverage!
There is very little real difference in the total cost of a DI policy when calculated out to age 65 – you can run the numbers yourself – but the potential benefit is enormous to the younger person. And it is not just the potential claim amount. The real benefit is being able to qualify for a plan without limitations and exclusions. A 30 year old who decides to wait until 45 to purchase a policy may discover that he has back problem that will not longer be covered by his DI policy – one of the leading causes of DI claims.
The hazard of long term disability at any age is too significant to be ignored. Delaying the purchase of disability insurance must be avoided at all costs. “Are you self insuring any DISABILITY care”
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What to look for in a disability policy
(based on an article by Allen Checkoway – Health Insurance Resources – 1-21-04)