Why Younger Generations Need Disability Insurance (Just Like You)

As graduation caps fly at commencement ceremonies across the country, more than a million college graduates are preparing to enter the workforce with careers that offer insurance benefits for the first time. But many are unlikely to take advantage of income protection due to cost and the belief that they don’t have any physical risks at their jobs that would necessitate an insurance purchase.

May is Disability Insurance Awareness Month and the perfect time to highlight why younger generations should be prepared for unexpected illness or injury. The Social Security Administration states more than 25 percent of today’s new entrants into the workforce will experience an income-disrupting disability during their working years. Still, only 35 percent of young adults own a disability insurance policy through work or on their own, and only 57 percent have life insurance, according to a recent survey by LearnVest and The Guardian Life Insurance Company of America. Young people are also less likely to have an emergency fund in place should they need to leave the workforce. 

Disability is often viewed as a catastrophic injury, which can explain why younger, invincible-minded people feel they will never need disability insurance, according to Lawrence Hazzard, vice president of Product Strategy at Berkshire Life Insurance Company of America, a Guardian company. The Council for Disability Awareness lists the most common causes for disability as muscle, back and joint disorders, spine and nervous system-related disorders, cardiovascular and circulatory diseases and cancer. Disability can also include complications from pregnancy and childbirth, and mental disorders including depression.

Without proper income protection, your children or grandchildren are a risk to themselves and to your family. Should a disability result in the loss of income, you may find your own finances supporting others who were unprepared. Choosing appropriate disability insurance takes careful consideration of not only current life situations but future circumstances – and the worst-case circumstances at that. You may want to talk with a Certified Financial Planner who can work with you and your family to discuss the benefits of disability insurance as a need to ensure incomes continue to flow even if they (or you) can’t go on working.

FINANCIAL FACTS

Let’s Go Shopping – Retail sales by American consumers in March 2013 totaled $418.3 billion compared to $406.8 billion in March 2012, a 2.8 percent year-over-year increase (source: Census Bureau, BTN Research).

Looking For A Job – A total of 1.8 million students will graduate from college as part of the Class of 2013 (source: National Association of Colleges and Employers, BTN Research). 

Optimistic – One hundred of 135 money managers in the U.S. (74 percent) surveyed in mid-March 2013 were either “bullish” or “very bullish” on the U.S. stock market through December 2013 (source: Barron’s, BTN Research).