According to the Council for Disability Awareness, most people don't know that most income-disrupting disabilities are caused by common health issues. What's more, barely 40 percent of respondents say they've thought about taking steps to protect their income.
The council's survey found 71 percent of respondents said disability is most likely caused by serious accidents. In reality, insurance statistics show that only 9 percent of long-term disability claims result from serious accidents. "Even though serious long-term and even permanent disabilities do occur, most income-interrupting disabilities are due to more common causes like back and joint pain, chronic diseases, cancers, depression and even pregnancy," said Barry Lundquist, president of the CDA, in a statement.
There's also a misperception about who is susceptible to a disabling condition. More than 80 percent of respondents think a disability can happen at any time, yet, the council says, a "significant number" don't believe they're personally at risk.
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Women also think men are most likely to become disabled, but statistics show that across most age groups, women are more susceptible. "These gaps in understanding such a fundamental financial security issue are alarming," said Lundquist. "Employees need to be better educated on how likely it is that either illness or injury can keep them out of work for a prolonged period of time, and how they can protect themselves and their incomes from that risk."
According to the council, 71 percent of Americans live paycheck to paycheck and nearly two-thirds do not have funds earmarked for emergencies.
More than 50 percent of respondents are aware of the direct correlation between disability and inability to earn an income. If they were to lose their income, 65 percent said they could cover their expenses for one year, at the most.
Lundquist says employees need to talk with their employers and other advisors about what their benefits will cover if they become disabled.
"Understanding is only half the battle; employees must take action to protect their income in case they become sick or injured," Lundquist said. "In today's world where employees perceive that financial security is more fragile — and more valued — than ever before, we all need to recognize that all financial security ultimately starts with the income stream. Protection of that income stream is more critical than ever before."
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