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Common Misconceptions About Disability Insurance

Common Misconceptions About Disability Insurance

| March 26, 2024

According to research by Global Disability Rights Now, nearly 20% of the US population lives with a disability. Given the substantial number of Americans affected, getting disability insurance can be life-changing.

This type of insurance offers financial assistance by compensating for a portion of lost income when individuals are unable to work due to disability. However, despite its importance, misconceptions surrounding disability insurance cause many to underestimate its role in ensuring financial stability during unexpected circumstances.

Here are some common myths that may prevent you or your loved ones from fully understanding the value of disability insurance.

Myth 1: Not for Healthy People

Disability doesn't discriminate based on health; you don't need to write it off just because you’re back to full health now. What people may not realize is that there is a possibility that the unexpected will happen at any time. Disability insurance can be a great support if you cannot go to work regularly.

Myth 2: Social Security Disability Benefits Are Enough

Relying solely on Social Security Disability Insurance (SSDI) can be risky. The approval process for SSDI can be lengthy and stringent, and the benefits may not be sufficient to cover all living expenses. Disability insurance provides a more immediate and flexible solution, offering a quicker payout and allowing you to maintain your lifestyle and financial responsibilities during challenging times.

Myth 3: Benefits Only Older People

Accidents and illnesses don't wait for the "right" age. Disabilities can strike at any stage of life. By securing disability insurance early on, you protect your current financial situation and lock in more favorable rates. Waiting until later in life may result in higher premiums or, in some cases, the inability to obtain coverage due to health changes.

Myth 4: Workers’ Compensation Is Enough

While workers' compensation covers injuries sustained on the job, it may not cover disabilities resulting from illnesses or accidents outside the workplace. Disability insurance offers comprehensive protection, covering many scenarios that workers' compensation may not address. It acts as a supplemental layer of security, ensuring financial support for disabilities, regardless of where they occur.

Myth 5: Savings Are Sufficient

While having savings is undoubtedly beneficial, it’s essential to consider the potential duration and financial impact of a disability. Disabilities can result in extended periods away from work, leading to substantial financial strain. Disability insurance ensures a consistent stream, preventing the depletion of savings and maintaining financial stability throughout the recovery process.

Myth 6: Only Group Disability Insurance Is Required

Group disability insurance from an employer is a valuable benefit, but it may not provide sufficient coverage for you. Group policies often have limitations and may not cover all income sources or specific job-related risks. Supplementing employer-provided coverage with an individual disability insurance policy ensures a more comprehensive safety net tailored to your needs and circumstances.

Understanding the realities of disability insurance is crucial for making informed decisions about financial protection. By dispelling these common misconceptions, you can recognize the importance of this type of insurance in safeguarding your income and ensuring financial stability during challenging times. At Jaks Financial, I can help you by offering insurance, wealth management, and financial planning strategies. Contact me for a personalized consultation.