MILWAUKEE – According to Northwestern Mutual's 2016 Planning & Progress Study, half of Americans rely on their own job income to meet their financial obligations, yet more than two thirds (69%) do not own disability insurance to protect this integral asset in case an illness or injury interferes with their ability to work.
This is concerning considering that there are one in four odds of becoming disabled for three months or more during one's working career and, per Life Happens research, nearly half of Americans would find themselves in financial trouble in a month or less after incurring a disability.
"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, Northwestern Mutual vice president – disability income. "Our research shows that the majority of Americans (58%) view financial security as a key aspect of the American Dream. Unfortunately, a disability without income protection can quickly turn that dream into a nightmare by creating financial disruption that may take years to repair."
Disability income insurance is specifically designed to replace a significant portion of income and help with expenses and lifestyle needs if sickness or injury prevents a person from earning a living. This can help preserve an existing nest egg, provide flexibility to keep contributing to retirement savings and enable an individual to focus on their health without added financial stress.
However, despite the benefits, about 7 in 10 Americans do not own disability insurance and are most likely to manage the financial implications of income interruption by reducing expenses (51%) or taking money from their personal savings (35%), which can have a long-term detrimental impact.
"As life expectancies and costs increase, people are already tightening budgets and stretching savings to prepare for the possibility of an extended retirement," continued Stribling. "Disability income insurance is an easy, affordable way to relieve some of the pressure of the unexpected and keep retirement planning and other financial goals on track. Protecting the one asset that protects all other assets should be at the core of any financial plan."
May is Disability Insurance Awareness Month and an opportune time for producers to discuss available options with clients and potential clients, including the differences between group policies offered by some employers and individual supplemental policies that may offer a higher level of protection and could be maintained through a job change.
NorthwesternMutual.com provides a variety of tools and educational resources, including a new Disability Insurance Calculator that analyzes individuals' current financial plans to answer the question: "What would your life be like without a paycheck?"
About The 2016 Northwestern Mutual Planning & Progress Study: The Study explores the state of financial planning in America today, and provides unique insights into people's current attitudes and behaviors toward money, goal-setting and priorities. It was conducted by Harris Poll on behalf of Northwestern Mutual and included 2,646 American adults aged 18 or older (2,026 interviews with U.S. adults age 18+ in the General Population and an oversample of 620 interviews with U.S. Millennials age 19-35) who participated in an online survey between Feb. 1 and Feb. 10, 2016. For more information, please visit www.northwesternmutual.com.
May is Disability Insurance Awareness Month
For more articles, information and access to resources to learn about and promote May as Disability Insurance Awareness Month, please visit these links:
- Developing a culture of risk reduction with Disability Income Insurance
- Council for Disability Awareness: http://www.disabilitycanhappen.org/diam/
- Life Happens: https://www.lifehappens.org/industry-resources/agent/awareness-campaigns/disability-insurance-awareness-month/introduction/
- AHIP:Disability Insurance – It’s Time for Awareness and Advice
- May is Disability Insurance Awareness Month
- Millennials' love/hate relationship with insurance
- Glad you asked: The 5 most important things to know about life insurance
- "Do-It-Yourselfers" not as capable as they think at managing finances
- May's Disability Insurance Awareness Month campaigns focus on younger working adults; small business owners
- Med Supp market sees 6% growth in 2016 according to new data
- Digitization ensuring insurance is no longer a costly headache
- Leigh Ann Pusey stepping down as AIA’s President and CEO
- Lemonade adds California as its third state