A 2014 study of Canadian workers revealed that most individuals vastly underestimate the likelihood that they will become disabled. While nearly half of workers surveyed believe that disability occurs rarely, in reality over 14% of Canadians are currently on disability, while roughly 33% of individuals will experience a period of disability lasting longer than 90 days during their working lives.
While this study only involved Canadian workers, there is no reason to believe the same statistics, and the same lessons, can’t be applied to American workers.
Mark Hardy, senior manager of Life and living Benefits at RBC insurance stated that “research indicates that Canadians are overly optimistic about avoiding a disability and lack of understanding reinforces the need for more education around this critical issue.”
Mr. Hardy further stated that “there is a mistaken perception that disabilities tend to be catastrophic in nature – caused by one-time, traumatic events. Most Canadians don’t recognize that common, chronic conditions such as mental illness cause the majority of disabilities. In fact, less than 10 percent of disabilities are caused by accidents.”
The survey also revealed other misinformation held by workers regarding disabilities:
- While only 20 percent of workers believe a disability would most impact their ability to work, more than three out of five workers have been exposed to someone having taken time off work due to a disability, with roughly 25% having had taken time off themselves.
- While one out of four individuals believes that disability is the result of one’s own actions, mental illness, cancer, cardiovascular diseases, and musculoskeletal diseases such as arthritis cause more disabilities than accidents. In fact, these diseases are six times more likely to be the case of disability.
What does this mean for the average worker? First, you should confirm your Long Term Disability (LTD) coverage with your employer. If you aren’t covered by Long Term Disability insurance through your employer, you should strongly consider purchasing an individual Long Term Disability policy.
Even if you are covered by an employer-sponsored Long Term Disability Plan, you should consider purchasing an individual policy as a supplement. Not only does this provide you with additional benefits should you become disabled, but it increases your chance of getting an LTD claim approved. Individual policies are governed by state law, rather than the Federal law of ERISA, which governs employer-sponsored plans. Because ERISA doesn’t allow insurance companies to be sued for damages beyond the benefits owed, group insurers who are governed by ERISA are much more likely to deny your LTD claim than insurers who provide individual LTD policies. Purchasing an individual policy could provide you the state of mind you need to protect your family in times of crisis.