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Calculating Whether You’ll Need Disability Insurance is a Crapshoot

August 20, 2012

But Don’t Gamble with Your Claim.

Trying to decide whether to insure your income by determining your chances of becoming disabled? Good luck.

According to a New York Times article, calculating your likelihood of disability on the job is something akin to predicting the probability of winning the lottery. But, should you indeed be injured on the job, gambling with disability insurance is not an option.

“You have an 80% chance of becoming disabled during your working years,” the first sentence of a New York Timesarticle reads. However, while that statistic is arresting, the next one is less so: “Or maybe it’s 52%.”

Pinpointing your risk of becoming disabled on the job is indeed a challenge, but a necessary endeavor in order to assess your need to insure your income. To illustrate this, the article’s author later notes yet another figure he says experts who’ve studied the disability insurance industry for years typically cite—30%.

Statistics Skewed

One reason it’s so difficult to determine the likelihood of sustaining a disabling injury on the job is because many statistics available on the topic come from the Council for Disability Awareness (CDA), which is comprised of disability insurance companies that want to sell you a policy. (The CDA cites the 80% chance of becoming disabled.)

Another challenge arises because the official definition of “disabling injury” is extremely broad. The article quotes theNational Safety Council definition as follows: An injury that “interferes with normal daily activity one day beyond the day of injury.” In other words, if you’re injured at work and take the following day off as a result, you fall within the definition of “disabled.”

Unconsidered Factors

In addition, other factors that influence your risk of loss of income due to disabling injury aren’t necessarily factored into the official risk rate:

  • The number of injuries at work is lower for white-collar workers than blue, for instance.
  • It’s lower for people who don’t smoke, have no chronic health conditions and eat healthy food.
  • Further, data is skewed by fake claims—people who claim to be disabled but aren’t.
  • And since doctors, who buy their own disability coverage, tend to use it, the risk can be adjusted even lower—around 10%.

Collecting a Claim

Unfortunately, calculating your risk of injury on the job isn’t really much use when you’re considering whether to insure your income. Because no matter what figure you arrive at, if you are disabled due to an injury at work, you’ll need coverage. About a third of workers in the U.S. do, according to the Bureau of Labor Statistics.

(Social Security won’t support you either—at least not for quite a while, as it may take a year or more to process your claim—or longer if you have to appeal a denial.)

Navigating Your Claim

Even if you have disability insurance, you’ll need an experienced attorney to help you navigate your way to receiving payment for a claim, as insurers typically try to force you to work in any job you can do—that is, if they don’t outright deny you benefitsUnum in particular is notorious for denying claims.

Don’t Gamble with your Disability Insurance Income

The difficulty of ascertaining how much disability insurance you need, what type and how to ensure payment should you file a claim means it’s crucial to have an insurance attorney on your side. It’s no exaggeration to say that having an attorney who’s “been there, done that” is a prerequisite to insuring your income in the event of disability. Don’t gamble with your disability insurance income.

Contact us. We’ll help you set up a safety net to catch you if you fall.

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