Do you know what you have, and do you have what you need?

Questions and Answers


What is the risk of becoming disabled?

Just over 1 in 4 of today's 20 year-olds will become disabled before they retire.

Over 37 million Americans are classified as disabled; about 12% of the total population. More than 50% of those disabled Americans are in their working years, from 18-64.

The following statistics come from the Council for Disability Awareness’ Personal Disability Quotient (PDQ) disability risk calculator:

A typical female, age 35, 5’4", 125 pounds, non-smoker, who works mostly an office job with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:

  • 24% chance of becoming disabled for 3 months or longer during her working career.
  • 38% chance the disability would last 5 years or longer.
  • On average, the disability would last 82 months.

If this same person used tobacco and weighed 160 pounds, the risk would increase to a 41% chance of becoming disabled for 3 months or longer.

A typical male, age 35, 5’10", 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:

  • 21% chance of becoming disabled for 3 months or longer during his working career.
  • 38% chance the disability would last 5 years or longer.
  • On average, the disability would last 82 months.

If this same person used tobacco and weighed 210 pounds, the risk would increase to a 45% chance of becoming disabled for 3 months or longer.

Factors that increase the risk of disability: Excess body weight, tobacco use, high risk activities or behaviors, chronic conditions such as; diabetes, high blood pressure, back pain, anxiety or depression, frequent alcohol consumption or substance abuse.


Calculate your own Personal Disability Quotient (PDQ)
http://www.whatsmypdq.org

 

What are the trends for needing disability?

In the last 20 years, deaths due to the "big three" (cancer, heart attack and stroke) have gone down significantly. But disabilities to those same three are up dramatically! Things that used to kill, now disable us.

As the following table illustrates, deaths have decreased while disabilities are up dramatically. For example, the numbers of deaths due to hypertension have decreased by 73%, yet disabilities due to hypertension have increased 70%.

Cause

Death 

Disability

Hypertension 

down 73%

up 70%

Heart Disease 

down 28%

up 44%

Cardiovascular 

down 48%

up 36%

Diabetes 

down 27%

up 36%

All Four 

down 32%

up 55%

Statistical information derived from: the Society of Actuaries, the National Safety Council, the Million Dollar Round Table, the National Underwriter-May 2002, the JHA Disability Fact Book, 2003/2004 Edition, Need for Disability Insurance.

 

How long does disability typically last?

Likelihood of using disability insurance versus life insurance before age 65:

Age

Likelihood 

30 

4.0 to 1

35 

3.5 to 1

40 

2.7 to 1

45 

2.1 to 1

50 

1.8 to 1

55 

1.5 to 1

 

Statistical information derived from: the Society of Actuaries, the National Safety Council, the Million Dollar Round Table, the National Underwriter-May 2002, the JHA Disability Fact Book, 2003/2004 Edition, Need for Disability Insurance.

 

Should I buy disability insurance from my employer?

Advantages of employer sponsored disability insurance.

  • May be subsidized.
  • Underwriting concessions.
  • Gender-neutral pricing (advantage for women).

Disadvantages of employer sponsored disability insurance.

  • If paid for by employer, the benefits are taxed as ordinary income.
  • Not portable.
  • May not provide adequate replacement of income for higher wage earners.
  • Benefits offset by government sponsored disability programs.