Avoid common life insurance mistakes
An illness or injury resulting in a loss of income can leave a family in financial ruin. Often times, expenses increase when you are unable to work. For example, rehabilitation, care giver and extra medical cost increase normal living expenses following an illness or injury that prevents you from working. These are life insurance mistakes you can't afford to make.
Life insurance mistakes can make things worse
If your life insurance policy does not pay you cash if you are stricken with a heart condition, cancer, stroke or other critical and chronic illnesses, then it may be time to look for a policy that can. It's one life insurance mistake you can't afford to make.
You don’t have to take our word for it. The statistics are not in anyone’s favor.
Consider it some life insurance mistakes if the policy doesn’t cover the possibilities of a traumatic event happening to you.
Consider these facts.
Every “1 second”
A disabling injury occurs in theU.S. every one second. A fatal injury occurs every four minutes.
- National Safety Council®, Injury Facts® 2010 Ed.
Bankruptcy
HarvardUniversity reports 62% of all personal bankruptcies filed in theU.S. in 2007 were due to medical expenses.
- June 4, 2009. The American Journal of Medicine
Unexpected sickness and injuries contribute to 350,000 personal bankruptcies each year.
(Source: "Illness and Injury as Contributors to Bankruptcy," Health Affairs, 2005)
3 in 10 Workers
Disability will happen to almost one-third of workers before they retire.
-Social Security Administration, Fact Sheet, January 31, 2007
Every 13 seconds
Injuries cause disability every 13 seconds, motor vehicle deaths occur every 12 minutes.
- National Safety Council®, Injury Facts® 2008 Ed.
3,000 per Hour
The amount of Americans that became disabled in the past hour is almost three thousand.
-National Safety Council, "Injury Facts 2008 Ed
35% increase in disability
Since 2000, the number of disabled American workers has increased by thirty-five percent.
- Social Security Administration, 2007
Every 3 seconds
Disability from injury happens every 3 seconds at home and fatal injuries occur every 12 minutes.
- National Safety Council®, Injury Facts® 2008 Ed.
2.1 million
Motor vehicle accidents disabled 2.1 million in 2008; fatal motor vehicle accidents were 39,000.
- National Safety Council®, Injury Facts® 2010 Ed.
490 Americans
Life insurance mistakes are those that don't consider the possibility or injury or sickness happening to you.
Is the amount of Americans that became disabled in the last 10 minutes.
- National Safety Council®, Injury Facts® 2010 Ed.
43% of all people
Prior to age 65, forty-three percent of all people age 40 will have a long term disability event.
- JHA Disability Fact Book, 2008
Disability More Likely than Death
Being disabled for three months is more likely than dying in any given year.
-Society of Actuaries
51.2 million Americans
Eighteen percent of the population – some 51.2 million Americans has some level of disability. How many people do you suppose have made life insurance mistakes in this area of insurance?
-U.S. Census Bureau, July, 2006
Employment Rate of People with Disabilities
33.1 million people with disabilities are between the ages of 16-64.
Of those disabled, 18.5 million are working.
55.8% of disabled working age Americans are working.
Of the 18.6 million working age Americans,
60% of men with disabilities are employed.
51..4% of women with disabilities are employed.
US Census Bureau, Disability Status 2000
Council For Disability Awareness found:
90% of American workers underestimate their own chances of becoming disabled.
85% express little or no concern that they might suffer a disability lasting three months or longer.
56% do not realize that the chances of becoming disabled have risen over the past five years
- Council for Disability Awareness, 2007 Disability Awareness Survey
1 in 5 U.S. Employees
U.S. employees to miss work for at least a year before they turn 65 due to an accident or sickness.
(Source: Life and Health Insurance Foundation for Education, Nov 2005)
Disability and Retirement Savings
Most Americans can't afford to become disabled
The National Bureau of Economic Research:
50% Americans said they "certainly would not" or "probably would not" be able to come up with $2,000 in the event of an unanticipated event, such as an unexpected medical bill.
The majority said they would have to rely on more than one method to come up with the emergency funds.
60% said they would dip into savings
34% said they would have to ask family and friends for help
29% said they would have to resort to credit cards, a home equity line of credit, reverse mortgage or unsecured loan
- Lusardi, Annamaria, Daniel Schneider, and Peter Tufano. "Financially Fragile Households: Evidence and Implications." The National Bureau of Economic Research. Bulletin on Aging and Health, May 2011. Web. <http://www.nber.org/papers/w17072>.
$38,400
The medium household income in 2007 that include any working age people with disabilities in theU.S. was $38,400.
-U.S. Census Bureau, American Community Survey, 2007
70% of Working Americans
The percentage of working Americans that do not have enough savings to meet short term emergencies is over seventy percent.
National Investment Watch Survey, A.G. Edwards Inc., 2004
No Pension & No Retirement Savings
The social Security Administration found that over fifty percent of the workforce has no private pension plan and a third have no retirement savings.
- Social Security Administration, Fact Sheet 2007
$1,004 a Month
Social Security Disability Insurance pays on average $1,004 in monthly disability benefits.
-Social Security Administration, 2008
70% exposed to Disability
Seventy percent of American workers in the private sector have no long-term disability protection.
-Social Security Administration, 2007
71% of Americans
A survey conducted by the American Payroll Association found that seventy-one percent of American employees live from paycheck to paycheck.
- American Payroll Association, "Getting Paid inAmerica" Survey, 2008
Low Emergency Funds
A small percentage, only 40% of adult Americans have a separate emergency savings fund.
National survey commissioned by the Consumer Federation ofAmerica (CFA) and carried out by Opinion Research Corporation, February 2007
401(k) or IRA Contributions
Retirement plan contributions are not unknown or thought about by more than 35% of workers if they are not able to earn an income for a period.
-Council for Disability Awareness, 2007 Disability Survey
Causes of Disability
Illness
90% of disabilities are caused by illnesses
JHA Disability Fact Book, 2008 Edition
Work Related Disabilities
Over 85% of disabling accidents and illnesses are not work related
National Safety Council®, Injury Facts® 2008 Ed
Cancer and Heart Disease
Most long-term absences are actually due to illnesses, such as cancer and heart disease. However, many people think that disabilities are typically caused by freak accidents
Life and Health Insurance Foundation for Education November, 2005
Disabilities of Men and Women
Disabilities due to pregnancy in insured women between the ages of 30-39 (mostly complications of pregnancy) are the most prominent disability claim type. Insured men and women in their prime working years between the ages of 30-59, the medical conditions causing the most disabilities are cardiovascular problems, musculoskeletal conditions and cancer.
- Millman, sponsored by Life and Health Insurance Foundation for Education (LIFE), "The Real Risk of Disability in theUnited States", 2007 (http://www.lifehappens.org/pdf/Real-Risk-of-Disability-paper-FINAL.pdf)
Disability from Stroke
The leading cause of long term disability is stroke.
- Centers for Disease Control and Prevention, 2007
http://www.cdc.gov/stroke/facts.htm
2 Years
The average length of time for long term disability absence is two years.
Commissioner’s individual disability table A
Chances of disability compared to other risk
Chance of missing at least 90 days of work due to disability is just under 1 and 3.
America’s Health Insurance Plans (AHIP). Baby boomer Awareness of Disability Risk Study (2008)
Compared to other risk.
Chance of using your homeowners insurance is 1 in 20.
International Organization for Standardization (ISO). Homeowners insurance Losses 2002-2006. (2008)
Chance of using your auto insurance is 1 in 15.
Highway Loss Data Institute. Coalition Coverage Insurance Losses in Years Since Introduction, 2004-2006 (2008)
Other disability figures.
United States Census Bureau: Over 51 million Americans are classified as disabled. (Largest Minority Group In TheU.S.)
American With Disabilities 2002. US Bureau of the Census May 2006
A disabling Injury occurs every two seconds.
Life insurance mistakes can cost you more than money. Your health can also be effected.
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