Relatively few Americans have disability insurance, a fact that Northwestern Mutual describes as troubling in a recent study on worker income and benefits.
Seventy percent of Americans derive their income principally from a paycheck, rather than retirement income or investments. But a large percentage of those who depend on being healthy to make money are not doing much to protect for unexpected events that might threaten their health, and therefore, their income.
Sixty-nine percent of those surveyed do not have a policy that will guarantee them income in the event of an injury or illness. And yet, noted Northwestern Mutual, the average U.S. worker has a 25 percent chance of enduring a disability that keeps him or her off the job for at least three months.
The cost of medical care as well as the lost income can wipe out a worker’s savings.
"The risk of experiencing a serious illness or injury is more common than we'd like to believe, and the impact extends way beyond the physical," said Steve Stribling, a Northwestern Mutual vice president who heads the company’s disability insurance division.
The survey found that most Americans said they would cope with a work-interrupting disability by cutting expenses (51 percent) or by dipping into savings (35 percent).
Similar but distinct from disability insurance, short-term care insurance, a product designed for those who are recovering from an illness or injury and need help doing one or a number of basic daily tasks, has been on the rise in recent years. However, it is not clear whether those who are buying such plans are indeed seeking care for a short-term recovery or if they simply cannot afford long-term care.