New Study Reveals Importance of Disability Insurance

Ontario, CA (PRWEB) May 22, 2012

Two-thirds of Americans who work in the private sector lack disability insurance. This fact is startling considering that most respondents said missing work for three months or more due to sickness or injury would cause them financial hardship.

A new study conducted by the Consumer Federation of America, a nonprofit coalition of consumer groups that supports expansion of employer-provided disability insurance, and Unum, a disability insurance provider, revealed that two-thirds of Americans who work in the private sector lack disability insurance. This fact is startling considering that most respondents said missing work for three months or more due to sickness or injury would cause them financial hardship, says Darras.

Disability insurance often protects workers from other programs, like workers' compensation and don't provide enough coverage in the event that a worker had to go off the job for an extended period of time. Often, workers' compensation programs only provide coverage to workers who become ill or injured on the job, but do not protect against time lost due to outside injury or a sickness unrelated to the workplace, says Darras.

"This study reveals just how unprepared many Americans are if they were to become ill or injured and unable to work for months or even years. Too many workers, especially those who are still young, feel it will 'never happen to me,'" says Darras.

Darras advises workers to purchase an individual disability policy young and to buy a lot while people still have the extra income that kids typically take up. Following this strategy will provide a more affordable premium, and purchasing the maximum benefit one can afford will keep income levels as close as possible to policyholders' current standard, especially if one must go on disability.

"Sound decisions early in your career will help guarantee financial security later on. Take time now to make sure you will be protected financially when it comes to individual, short and long term disability coverage," says Darras.

Many people see the need for disability insurance, but don't know how to afford it. One way to save on a disability policy is to opt for a longer waiting period before benefits start. If there are other investments that will allow some "rainy day" room or 6 months of savings set aside, then a waiting period will help save money while still protecting against loss of income due to injury or illness.

"Saving money is good, but always make sure to read the fine print before signing," says Darras, "If a premium sounds too good to be true, it normally is." Some policies contain exclusions and restrictions on certain disabilities, such as mental health, chronic pain, fibromyalgia, and chronic fatigue syndrome. Others limit benefits to two years or less. Two years may cover a policyholder in the event of an injury, but definitely will not, in the event of a serious illness. If there are questions about the fine print, consult an experienced insurance lawyer.

Paying a little extra for an individual disability policy provides the ability to take advantage of the coverage paid for, when its needed most. No one can put a price on the peace of mind of knowing they are protected when an accident or illness strikes. Individual disability policies protect a family's income stream so their lifestyle can remain uninterrupted, says Darras.