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Why most objections to disability insurance don’t make sense

Read time
9 mins

It’s easy to think that nothing bad will ever happen to you.

The truth is, at least 51 million working adults in the United States don’t have disability insurance other than the basic coverage available through Social Security. This can lead to trouble because:

  • Only 48 percent of American adults indicate they have enough savings to cover three months of living expenses if they must cover themselves.
  • Half of American adults believe they can’t pay an unexpected $400 bill without having to take out a loan or sell something to cover the cost.

For these reasons and many more, “It won’t happen to me” isn’t a good enough reason to object to disability insurance.

Why get disability insurance?

Disability insurance covers some of your income if you can’t work — such as if an illness or injury hits you and you can’t continue your current job responsibilities.

The younger and healthier you are, the easier it is to qualify for a disability insurance policy. As you age, your disability insurance premiums increase, and as you start to experience health problems as you age, you may find it hard to qualify for an affordable policy.

The 5 most common objections

Disability insurance is necessary, yet many Americans don’t have it. Here are the five most common objections to disability insurance — and why they don't really make all that much sense.

Objection 1: “I’m young and healthy. I don’t need it.”

Au contraire. Needless to say, you won’t always be young, and you certainly may not always be healthy.

Looking down the road, more than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition, according to disability statistics from the Social Security Administration.

Thousands of young people get seriously injured, often as the result of traumatic events. Cancer or mental illness can affect the young as well as the elderly.

Remember how your grandma always said, “Famous last words”? Don’t assume you’ll always be young and healthy and able to work.

Objection 2: “I can’t afford disability insurance.”

Disability insurance is relatively inexpensive. Breeze estimates that individuals will spend between one percent to four percent of their annual income on disability insurance. To put that into perspective, if you make $100,000 per year, you’ll spend $1,000 at a minimum on disability insurance. (Now, it’s possible that you pay more or less than those ranges depending on your coverage needs.)

You should also expect to pay between two percent and six percent of your policy’s monthly benefit amount in your premium — the amount you pay per month to your insurance company. Of course, you may pay more or less than these ranges depending on personal factors, job occupation, and policy choices.

Check Breeze’s charts for more information about how much you may pay for disability insurance, all based on your own personal situation.

Objection 3: “I can afford it. I just don’t want to pay for it.”

Haven’t you encountered people who can afford to buy things (especially if you’re a salesperson) but they just haven’t been put in a situation yet where they realize they need disability insurance?

For example, let’s say a family member encounters a disabling condition — such as, your uncle gets into an accident and can’t work.

He doesn’t have disability insurance and he’s in a precarious financial position. You see this and witness his experience, then go get disability insurance.

Sometimes you have to experience something personally before you realize you can afford it and you do need it. Just don’t wait until you face a situation where that occurs.

Objection 4: “I’m too old to buy disability insurance. It’ll be too expensive.”

People work to a later age these days. Retirement at age 65 is a pipe dream for many families because most individuals haven’t saved enough for retirement and can’t afford to stop working the minute they turn 65. COVID-19 has shown many individuals that reality as well — and that disability insurance is a must. You must protect your future with disability insurance plans.

Again, aging means you’re more vulnerable to injury and illness and that means that getting disability insurance is an important step to protect yourself.

Another thing is that many people assume it’s cost-prohibitive to buy disability insurance. Check with Breeze to determine your actual costs. It might be more inexpensive than you think.

Objection 5: “I get so tired of spending money on so much stuff all the time. I have to buy something else?!”

Oh, yes. There’s so much you can buy. And insurance is always a “just in case something happens” purchase — not a super concrete buy, like a brand new car or house. (This reality makes it easier to justify not buying it.)

Here’s one way to make it a concrete scenario, really fast: If you think going down to 60% of your income sounds tough, imagine what would happen if it drops to $0. Unless you have significant savings or a spouse bringing in money through his or her paycheck, your situation could rapidly turn into the statistic mentioned above: That only 48 percent of American adults indicate they have enough savings to cover three months of living expenses if they must cover themselves.

Disability insurance adds to your expenses, yes. However, it’s better than choosing to not get it and finding yourself in a precarious financial situation.

How to get disability insurance in 4 easy steps

Breeze makes it easier than ever to get disability insurance. You may notice that you can get disability insurance in two different ways:

  1. You can look for coverage as an individual. Your best bet for stability is to get individual coverage; it's both stronger and more reliable. That’s why purchasing an individual plan is typically the recommended route, even if you already have group coverage.
  2. You can get covered as a group through your employer. Many employers offer group disability insurance as an employee benefit and may pay some or all of the premium cost. However, it’s easy to pinpoint the downsides to an employer-sponsored policy: It’s possible to lose coverage if you quit your job or lose your job. Your employer may also simply decide not to continue offering disability insurance.

Convinced you need disability insurance through Breeze? Great! Here are the steps you can take to get it — they’re simple!

Step 1: Click “Get My Quote”

Once you hit the “Get My Quote” button, you’ll enter your birthdate, gender, the type of worker you are (independent contractor, employee, business owner), how you’d categorize your current job (professional, technical, light labor, labor), whether you work at least 30 hours per week, your annual income, your ZIP code and whether you use nicotine. You’ll also include how you plan to use your disability insurance — to protect your future, for maternity leave or financial assistance. You’re also asked whether you want to compare life insurance rates, too.

Step 2: Review your rates

You’ll get a few quote ranges and also have the opportunity to click on “More Coverage Options” and customize your coverage a little more.

Step 3: Take 10 minutes to apply online

That’s it! The quotes you get aren’t set in stone — you still have to go through Breeze’s application process.

Step 4: Wait while underwriting occurs

Group plans help insurers spread their risk among a large group of policyholders but Breeze will do underwriting, which simply means that the company assesses the amount of risk you bring to the table.

Here’s what Breeze takes a look at:

Your age

Again, as we’ve already discussed, the cost of disability insurance increases as you age. That’s why buying disability insurance is a smart investment for healthy young professionals.

Your gender

Women can pay up to 40 percent higher premiums for disability insurance because they file more claims than men and for longer time periods.

Health history

Your health status right now plays into how healthy you’ll be later on in life. Underwriters consider your:

  • Past or current tobacco use
  • Chronic conditions
  • Family medical history
  • Current height and weight
  • Results from blood and urine tests

Your occupation

This is flat-out the case: Certain jobs are more dangerous than others. Naturally, firefighters, manufacturing workers, and construction workers are more likely to get injured on the job than IT workers or bankers.

Insurance companies consider the hazards of your work and how difficult it would be for you to return to work — based on your job duties.

Your annual income

Disability insurance benefits are based on a percentage of your income. The more you earn, the more benefits you will be able to collect if you become disabled. This means that high-income earners present a greater financial risk to the insurance company.

Your location

Where you live may also affect your costs. Underwriting also takes into consideration the regulations, claims history, and how much it costs to live in your state.

Get disability insurance — nix the objections

It’s time to put all your internal objections aside. Take a careful look at your situation, and if you don’t have lots of money to back you up if you do lose your job, you want to seriously consider getting disability insurance.

Breeze can help you every step of the way.

Melissa Brock is a 12-year veteran of college admission, founder of College Money Tips and Money editor at Benzinga. She loves helping families navigate their finances and the college search process. Check out her essential timeline and checklist for the college search!

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published December 7, 2020
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