If you, and/or your family depend on your paycheck to keep the monthly bills paid, and everything running smoothly, then the need for disability insurance is a no brainer. The most overlooked of the major types of insurance coverage is the one that actually covers a far more common risk--loosing your paycheck for a period of time because of a temporary illness or injury.

In a nutshell, if you suffer an illness or injury that prevents you from being able to work for a period of time, disability insurance replaces a portion of your income until you're able to return to work again. It is the top reason for foreclosures and bankruptcies in the U.S. today. We all think we're untouchable and it will never happen to us, but sadly we don't know what the future holds.

Here are 4 common mistakes people make when it comes to protecting their income:

Mistake #1 : You assume you'd never need it, or you don't work in a high-risk profession, so you pass on the protection

Reality: No one knows the exact numbers, but it's estimated that 30% of American workers will become disabled for 90 days or more during their working years. While it’s true that people in professions like farming, law enforcement and construction face greater risks, the odds of suffering a long-term disability are high for all workers because illness—not accidents—account for 90% of disabilities that keep people out of work (Council for Disability Awareness’ Long-Term Disability Claims Review, 2014).

Mistake #2 : You assume you have disability coverage through work.

Reality: Most people don’t. According to the U.S. Department of Labor, more than 70% of employers don’t offer long-term disability coverage. And short-term disability coverage or partial coverage wouldn’t be enough to meet your current and future financial obligations if you were unable to work for an extended period of time. So talk to your benefits manager at work to find out if you have coverage and what type it is.

Mistake #3 : You assume the government will provide you with assistance if something happens

Reality: It might, but most likely it won’t or at least it won’t for a long, long time. According to the National Safety Council, 73% of long-term disabilities are a result of an injury or illness that isn’t work related and therefore wouldn’t qualify for state-based Workers’ Compensation programs.

And If you were hoping to rely on Social Security disability benefits, know that about 45% of those who apply are initially denied, and those who are approved receive an average of around $1,100 a month. Plus, they often have to wait several years before those benefits begin. Could you wait several years while receiving no paycheck—and then live off of $1,100 a month?

Want even more reasons not to rely on government programs? Read our previous post here.

Mistake #4 : You assume you can rely on your savings until you could return to work

Most people overestimate the resources they have to cover their bills and expenses if they suffered an illness or injury that kept them from earning a paycheck. According to surveys, half of working Americans say they couldn’t make it a month before they’d feel the pinch financially, never mind that fact that many disabling illnesses or injuries often last for months or even years.

Ask yourself this question: If something happened to you, and you couldn't work for a period of time, how long would you be able to last without a paycheck? That answer illustrates the need to protect your income.

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Protect your paycheck, and protect your future.

Call Tenaya Insurance Services today at (925) 322-8073

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