On January 29, 2019, USA Today published an article, “Why millennials should consider disability insurance,” by Robert Powell.  The article argues for the importance of purchasing disability insurance at a young age, since most insureds are left with the financial strain of not having a stable income stream after disability.  These insureds often never consider purchasing disability insurance, or think they have enough coverage.  At McKennon Law Group PC, we see the impact of the denials of our client’s benefits every day, and fight to overturn the denial decisions of insurance claims our clients expected insurance companies to pay upon becoming disabled.  As we have seen, purchasing additional private disability insurance can prove to be crucial.

The article describes how the odds of being unable to work because of sickness or accidental injury are greater than the odds of a premature death.  Because of this, millennials should start thinking about disability insurance when planning for retirement:

The question any working person needs to answer, says Kevin Lynch, a faculty instructor at The American College of Financial Services, is this: “How will you support yourself the day you wake up but are unable to get up?”

The author describes that while sometimes a disability arises from a work-related accident or illness, which workers’ compensation may cover, and employers often provide group short- and long-term disability coverage as a benefit, individual disability policies can be helpful to supplement a group plan or provide additional coverage if a group plan is unavailable.

The author encourages millennials to consider the fact that they’re not invincible.  He notes that the best asset when you’re a young worker is your earning potential.  Indeed, a 30-year-old earning $100,000 a year will gross $3.5 million over the course of her working years.  But if that money cannot be earned due to sickness or injury, the potential for financial failure rises greatly.  “Without income, one cannot spend, save, invest or donate,” says Yan Katz, a financial adviser with The Bulfinch Group.

Since policies typically provide about 66% of gross wages, Katz says that the right benefit amount to purchase would be any portion of your current paycheck, including commissions and bonus, not covered by your employer’s benefit plan.

The article further discusses the many definitions of disability, including own-occupation, modified own-occupation, any-occupation and modified any occupation.  The most sought-after policy definition is “own-occupation” which means you will be considered disabled if you are unable to perform each and every responsibility of your current position.  He further notes that the younger you are, the better your chances of being successfully underwritten.

At McKennon Law Group PC, we often see insureds suffer from the financial strain of having their long-term disability claim denied.  A claim denial can be an especially traumatic experience when an insured expects a disability insurance company to provide benefits in a time of need.  As this article discusses, most people never expect to become disabled.  Even worse, they expect to be covered by an employer’s group policy, only to find their claim denied with no additional sources of income.  Under these circumstances, private disability insurance has proven to be exceedingly important in providing a financial safety net for our clients.

For a full view of the USA Today article, take a look at the article, here.