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Disability Insurance > Statistics

The Chances of Becoming Disabled

Disability Insurance Statistics

If you are like most of the people in the United States, you don't believe for one second that a severe injury or illness will ever prevent you from being able to work, and bring home an income. Quite frankly, even with all of the statistics, graphs, studies, and articles in the world you probably still won't ever believe it will happen to you. Keep in mind that your most important and valuable asset is your ability to bring home a paycheck, and you do need to own disability insurance to protect that asset. This page is designed to help you understand the need, the common causes, and the reality of what life could look like if you didn't protect your income with a disability insurance policy.

young couple in kitchen
A Prized but Often Neglected Asset
Comprehensive Odds, Charts and Statistics on the Need For Disability Insurance




Specific Causes of Disability Insurance Claims

Many people have a pre-conceived notion that a bad car accident would be the most likely thing to prevent them from being able to go to work. The reality is an illness accounts for over 80% of all long term disability insurance claims. An illness like cancer does not care what you do for a living, and will prevent anybody from being able to work like they are accustomed to. The chart below does an excellent job of showing you exactly what is causing the most claims, and highlights the reasons why you should protect your income with a policy now while you are still healthy, and able to qualify for a policy.

2014 CDA Long-Term Disability Claims Survey Disability Claims by Diagnosis

% of New and Existing LTD Claims
2012 2013
Claim Diagnosis Category New* Existing* New* Existing*
Musculoskeletal/Connective Tissue 28.7 30.8 28.6 28.7
Nervous System-Related 7.5 14.4 7.7 15.2
Cardiovascular/Circulatory 8.5 12.2 8.7 12.4
Cancer and Neoplasms 14.6 8.8 15.1 9.1
Mental Disorders 8.9 7.6 8.3 7.7
Injuries and Poisoning 10.2 7.6 10.3 7.7
Respiratory System 2.1 2.9 2.3 3.0
Infections and Parasitic Diseases 2.2 2.7 1.9 2.9
Symptoms, Signs and Ill-Defined 2.9 2.8 2.8 2.7
Digestive System 2.7 2.3 2.6 2.4
Genitourinary System 2.1 2.1 2.1 2.2
Endocrine, Nutritional and Metabolic Diseases and Immunity Disorders 1.3 2.1 1.3 2.2
Complications of Pregnancy and Childbirth 6.0 1.4 5.9 1.7
Skin and Subcutaneous Tissue 0.7 0.8 0.8 0.8
Congenital Anomalies 0.5 0.7 0.5 0.7
Blood and Blood-Forming Organs 0.2 0.3 0.2 0.3
Other 0.9 0.5 0.9 0.3
Total 100% 100% 100% 100%

As medical technology improves over time, so does our life span. The survival rates for illnesses that used to be a death sentence is only going to increase over time. However, that does not mean that you are going to be perfectly healthy and able to go to work should you get diagnosed with cancer, or heart disease. If you review some of the items in this chart, many of them share the same characteristics during a claim. Typically, if one is diagnosed with an illness like cardiovascular disease, it does not necessarily mean you become totally disabled that day. Illnesses tend to progress over time, and people tend to fight an illness. When one is diagnosed initially, you may have no loss of income yet, and you may not even have any loss of time or duties at work. Over time, your productivity tends to decrease, and so might your income. It is when your income decreases by 15% or more that your disability insurance policy with Guardian would kick in assuming you purchased the Residual Disability Benefit Rider. You may never become totally disabled, and just stay on a residual claim until you recover, or you may eventually get to a point where you are no longer able to perform the material and substantial duties of your occupation and become totally disabled.

In an illness claim, assuming you do recover from the illness, there is also typically a recovery period. If because of your occupation, your income does not automatically return to what it was before the claim, the residual claim could continue until you financially recover, not just until you physically recover. That is one of the best features of the Guardian disability insurance contract. You bought this policy to protect your income, and because Guardian does not have a loss of time or duties requirement in their Residual rider, it allows Guardian to pay you in a residual claim until you financially recover.




Odds of Death or Disability?

Are you more likely to become disabled or die before age 65? The 1985 Commissioner's Individual Disability Table A provides data on the probability of an individual becoming disabled. The 2001 CSO Ultimate table provides data on the probability of mortality. These are only probabilities and actual results will vary on each individual's characteristics (i.e. age, gender, occupation, health status, etc.).

Probability of a Disability lasting at least 90 days vs. Death
between the age shown in the table and age 65
Age % more likely to become disabled than die
Male Female
25 32% 147%
30 31% 141%
35 32% 135%
40 32% 125%
45 32% 111%
50 33% 94%
55 32% 79%
60 9.3% 10.6%
Mortality based on 2001 CSO Ultimate table (composite smoking status)
Disability based on 1985 CIDA, 90-day elimination period, occupation class 1. Statistics vary by occupation
Occupation Class 1: includes professional, technical and managerial occupations that are generally office duties only
1985 CIDA is the most current morbidity table for individual disability claim incidence adopted by most State Departments of Insurance


The above data shows that chances are you are more likely to become disabled than to die before age 65.




The Reality Of Disability

Your income does two things for you. It provides today's basic necessities and luxuries as well as serves as the foundation of your future plans. As long as you have the ability to earn an income, you are able to accumulate assets.

The graph below shows what your reality may look like in the event of a disability— if you do not already own disability insurance. Remember that you can only buy disability insurance while you are still healthy. Once a sickness or injury occurs you may, depending on the illness, no longer get a personal disability insurance policy to protect you and your family.

graph showing the effects of a disability on assets and income versus expenses

But what would happen if a disability should strike?

  1. Your need for the basic necessities of life would continue.
  2. Plans for retirement, children's education, etc. would have to be put off, if not forgotten altogether.
  3. You would have to do without luxuries, yet would still be obligated to meet such fixed expenses as mortgage, car and credit card payments.



Chances of a Long Term Disability

It's human nature - most of us don't want to think about getting sick or injured, or about struggling financially because we are unable to work. Yet it's a possibility we all must consider. The 1985 Commissioner's Individual Disability Table A provides data on the probability of an individual becoming disabled. These are only probabilities and actual results will vary on each individual's characteristics (Le. age, gender, occupation, health status, etc.).

Probability of a Disability lasting at least 90 days
between the age shown in the table and age 65
Age Male Female
25 20.2% 29.9%
30 19.6% 28.6%
35 19.0% 27.0%
40 18.2% 24.8%
45 17.1% 21.8%
50 15.4% 18.1%
55 12.6% 13.5%
Disability based on 1985 CIDA, 90-day elimination period, occupation class 1. Statistics vary by occupation
Occupation Class 1: includes professional, technical and managerial occupations that are generally office duties only
1985 CIDA is the most current morbidity table for individual disability claim incidence adopted by most State Departments of Insurance

Request a Disability Insurance Quote now to begin the process of purchasing your own policy.


The Chances of Remaining Disabled

Not all disabilities are short term in nature.


Probability of remaining disabled after meeting a 90-day elimination period
Age when disabled for at least 90 days Male Female
Percentage still disabled after 2 years Percentage still disabled after 5 years Percentage still disabled after 2 years Percentage still disabled after 5 years
25 27.3% 11.6% 25.2% 13.0%
30 30.7% 16.6% 28.2% 17.4%
35 34.8% 21.8% 32.2% 22.3%
40 39.4% 27.3% 36.9% 27.6%
45 44.5% 32.9% 42.0% 33.2%
50 49.7% 38.3% 47.2% 38.6%
55 54.6% 43.0% 52.2% 43.3%
Disability based on 1985 CIDC, 90-day elimination period, occupation class 1. Statistics vary by occupation
Occupation Class 1: includes professional, technical and managerial occupations that are generally office duties only
1985 CIDC is the most current morbidity table for individual disability claim incidence adopted by most State Departments of Insurance



Alternatives to Disability Insurance

Ask Yourself This One Important Question

Is my most valuable asset as well protected as my other assets?

In other words, have you made sure that if your income stopped because you were sick or injured and couldn't work, you wouldn't have to worry about how your bills were going to get paid? If you think you are already protected, think again.

Halfway Measures

Most alternatives to replacing lost income are only halfway measures.

  • Social Security Disability Benefits May Not Provide Adequate Protection

    Qualifying for Social Security benefits is very difficult because the disability must prevent you from doing any kind of work - not just your usual job.
    If you think you could get by on Social Security benefits, you may want to reconsider.

  • Workers Compensation Benefits May Not Be Adequate

    Workers Compensation only covers job related sickness or injury. In addition, these benefits are limited.

  • You can't rely on your savings, on your family or on a bank loan.

    If you saved just 5% of your income each year, a six-month disability would wipe out 10 years of savings, and when savings are gone your other assets would begin to dwindle as well. After your savings depleted rapidly, would family or friends be so willing to help you out? Even a bank wouldn't want to give a loan to a disabled person with no income and no guaranteed prospect of being able to repay.

The Sure Thing

If you want to be sure that your income is adequately protected during a disability, you need a disability insurance protection plan. But while such a plan can be designed to fit your individual needs, it is only as good as the Company and the disability insurance policies that stand behind it.




Potential Loss of Income

Your Health is Your Wealth

If you have trouble living within your income now, have you ever wondered how you would be able to live if your income suddenly stopped?

As you can see from the chart below, one has the most to lose early in life. What it does not show is that odds are the person making $2,000 a month at age 25 would also have likely increased his income over the years. Therefore the loss of income is even greater if a long term disability strikes.


Potential Loss of Income
Age when disabled 25 30 40 50
Monthly Income $2,000 $4,000 $6,000 $8,000
In one year you would lose $24,000 $48,000 $72,000 $96,000
In two years you would lose $48,000 $96,000 $144,000 $192,000
In five years you would lose $120,000 $240,000 $360,000 $480,000
By age 65 you would have lost    $960,000 $1,680,000 $1,800,000 $1,440,000

Owning a disability insurance policy should not be optional, and should not be a decision you need to think about. You can request a disability insurance quote from our web site today to begin the process of buying the product. It is a necessary foundation product every working individual needs to make sure they own so they are able to maintain their current lifestyle in the event of a long term disability. Most disability insurance policies sold by our agency provide that if a sickness or injury prevents you from performing the material and substantial duties of your regular occupation, there will continue to be money coming in the door to pay all of your bills.

Additional conditions, limitations and exclusions apply for all disability insurance policies. Please ask your agent or broker for complete details.

 
2016-33304 Exp 12/18