These comparisons are based on the 1980 CSO mortality table for death and the 1985 Commissioner's Disability Table for morbidity.

What Are the Chances of Long-Term Disability?
Current Age	Years Until Age 65	Probability of Long-Term Disability Before Age 65	Probability of Disability over Death
25	40	53.7%	2.2 Times
30	35	52.2%	2.3
35	30	50.3%	2.2
40	25	47.7%	2.2
45	20	44.3%	2.2
50	15	39.4%	2.2
55	10	32.1%	2.1
60	5	20.4%	2.0

The phrase "long-term disability" refers to a period of disability that lasts 90 days or more.

Statistics indicate the startling likelihood of suffering a long-term disability. For most, the lack of earning capacity that such a disability would cause would be unbearable — not only financially, but psychologically as well. Unlike death, when we suffer a disability, we experience the hardship, feel the pressures from creditors, and see the toll it takes on our family.

Disability income insurance is designed to protect our most important asset — our ability to earn money. When the income earner suffers a disability, the bills (heat, utilities, mortgage, food, etc.) don't stop. In fact, they usually rise (increased medical expenses, therapy, special care, etc.). When the owner of a business suffers a disability, the expenses of the business don't go away. When a business partner suffers a disability, the business cannot be placed on a disabled list. Clearly, the need to protect our income is a vital part of any long-term personal or business financial plan.

The following underscores the function of disability income insurance:

• "Under normal circumstances an individual's standard of living is balanced by the income he or she earns."


• "When accident or illness interrupts the flow of income, the standard of living outweighs the income, and the standard of living must inevitably fall."


• "Disability income insurance can, however, maintain the critical balance between income and the standard of living by providing sufficient income to maintain standard of living."

 

Often individuals mistakenly believe that group disability insurance or Social Security will provide the necessary income replacement in the event of disability. The fact is that one should not count on Social Security because many disabilities don't qualify for benefits. In fact, over 66 percent of those who apply for Social Security disability benefits are rejected on the first application. The eligibility requirements are stringent. For example:

• There is a five-month waiting period before you can apply for Social Security disability benefits. (Usually, benefits are not paid until 12 months or more have passed).


• To be eligible, the disability must be a result of blindness or a "medically determinable physical or mental impairment," which is expected to result in death or has lasted (or is expected to last) for a full year.


• If the applicant is able to engage in any gainful work, he or she will be denied Social Security benefits totally.

Anyone depending solely on Social Security or group disability insurance benefits to meet his or her income protection needs could be in for a major disappointment.

The need for disability income insurance is growing. Because of our American lifestyles and longer life spans, there is increased potential for disability to occur and for durations to be longer. In addition, inflation and escalating medical costs can quickly drain any savings or investments that have been put aside for a "rainy day." If we insure our cars and our homes, it only makes sense to insure the asset that made the cars and the homes possible — our ability to earn an income.

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