Broker Check

Myths and Reality of Disability Insurance

| September 26, 2019
Share |


“Of course I have life insurance. But I’m too young to worry about disability income insurance.”


Most people understand the need for life insurance. Yet, the truth is, a long-term disability can be just as financially devastating to a household as a death. After all, income is the foundation of the lifestyle you’ve created. If that income abruptly stopped, how would you maintain your household, cover expenses, repay student loan debt or continue to plan for your future? Could your savings alone sustain your family for a period of months, or, even worse, years?


“I have group coverage through my employer. I don’t need individual coverage.”


Group long-term disability (LTD) coverage is a great start to protecting income; however, unless supplemented, it likely will not be enough in the event you become disabled. An individual disability insurance policy is a terrific supplement to the foundation that group LTD provides and can help ensure that you’re adequately protected.

Reasons to consider supplementing group coverage:

  • Benefit caps put in place for the entire group often leave high-earning employees with the least amount of income protection.
  • Coverage is generally basic and cannot be personalized to your individual needs because it is not individually owned.
  • Since coverage is not individually owned, you cannot take it with you when you change employers.
  • Group coverage can be changed or cancelled at any time by your employer or by the insurance provider.
  • When premiums are employer-paid, net benefits are reduced due to taxation, minimizing income replacement.
  • Group LTD plans generally do not cover bonus compensation or retirement plan contributions.


“I’ll get disability insurance in a few years. I’m in perfect health right now.”


No matter how young and healthy you are, you’re still vulnerable to disability — whether through an accidental injury or an unexpected illness. Once you’re unable to work, it’s usually too late to get the protection you need. Consider Table A, which identifies several policyholders — some rather young — on claim. If they had waited “a few years,” they would have found themselves with no coverage when their disabilities occurred. Instead, they had the coverage they needed when they needed it.

Bonus: You can leverage your age and good health to lock in the most favorable coverage at better rates.


“Why should I pay for something I’ll never use?”


Disabilities can and do happen. When you consider the facts about disability, it’s easier to understand just how vulnerable we are:

  • Just over 1 in 4 of today’s 20-year-olds will become disabled before they retire.1
  • Accidents are not usually the culprit. Back injuries, cancer, heart disease and other illnesses cause the majority of long-term absences from work.2

If  you become too sick or injured to work, will you be ready? Considering the average long-term disability claim duration is 2½ yearsyour ability to maintain the life you created will likely be at risk.

Click here to go to our Disability Quote tool to see what is available for you!

1 U.S. Social Security Administration Fact Sheet, June 2017.
2 Council for Disability Awareness Long-Term Disability Claims Review, 2014.
3 Gen Re, U.S. Individual DI Risk Management Survey 2011, based on claims closed in 2010.
4 Claims paid for by Berkshire Life Insurance Company of America, a Guardian® company. Every claim is unique and must be evaluated on its own merits. Elimination Periods vary. The diagnosis of these medical conditions alone does not entitle an individual to disability benefits. An individual’s eligibility for benefits is determined on a case-by-case basis according to the terms and conditions of his or her policy.

Share |