For most architects, the idea that one could become disabled due to an illness or injury seems pretty remote. No matter how many times one may say, “It will never happen to me,” there’s no getting around the fact that it does happen—everyday—to people just like you. So what should you know about disability insurance?
Fact: The likelihood of a 20-year-old worker being disabled before they retire is more than one in four.
If this statistic seems high, it’s important to keep in mind that 90% of all disability claims are the result of common illnesses such as stroke or cancer, not random accidents. That’s why it makes so much sense to protect yourself—and your loved ones—from the financial impact a disability could have during your working years. After all, how long would you be able to make ends meet if you were out of work for a month, a year, or possibly even longer?
Fact: The average disability claim lasts almost three years. Yet, half of all working Americans couldn’t go one month without a paycheck before financial difficulties begin.
While Social Security may seem like the obvious solution, benefits are limited to long-term disabilities and hard to procure – with a six-month waiting period before payments begin. Even then, the income you receive may not be enough to cover your mortgage, medical bills, or any other day-to-day needs.
Fact: In 2016, the average monthly benefit paid by Social Security Disability Insurance (SSDI) was only $1,171 a month.
Workers’ Compensation is another program that provides disability benefits; however, not all employers are required to participate in it. What’s more, you will only qualify for benefits if injured on the job or become seriously ill due to a work-related activity. Injuries or illnesses that take place in the home are not covered under this program.
Fact: Less than 5% of disabling accidents and illnesses are work-related. Therefore, 95% of all disability claims are not covered by Workers’ Compensation.
There is, of course, one more potential source of disability benefits. While some may have access to disability coverage at work, these plans are often generic in nature and may not have all the features and benefits needed. And, because these plans accept a wide range of applicants, they often charge high premiums to your firm to help offset the risk. Plus, most workplace plans are not portable so one cannot take this coverage when changing jobs. And if you’re self-employed, you need disability coverage to ensure you can continue your firm, even if an illness suspends your work for a period of time.
This info graphic illustrates the reality of disability insurance.
While a disability can cause financial hardship at any age, it can be particularly troublesome for working-age families. After weighing all the facts, it’s easy to see why AIA members need—and deserve—a quality, economical source of disability protection. The AIA Trust developed a Group Disability Insurance Plan with New York Life Insurance Company substantial enough to stand on its own and flexible enough to be an extra safeguard for those members who want more financial security.
Learn more about the AIA Trust’s disability insurance programs.
Learn why disability insurance coverage is so important.