Weighing the Odds of Disability, for Insurance Purposes

One reason is that most people who have it got it through their employer and have given it little thought. Another is that people are not likely to go out and buy it on their own because it is so expensive, the exception being certain occupational groups, like doctors. Yet it does serve an important purpose in replacing a portion of your salary if you get hurt or become sick and are unable to work for several months or more.

Still, figuring out the real risk of becoming disabled is difficult. My colleague Ron Lieber wrote a Your Money column about the various and divergent estimates in 2010.

According to the Social Security Administration, a 20-year-old in 2011 had a 30 percent chance of being disabled for at least six months before retirement. That is a fairly scary statistic, but I couldn’t help thinking it was slightly misleading. After all, someone who moves refrigerators for a living is at greater risk for the most common disability claim — muscular-skeletal injury, according to Sun Life Financial — than someone who works in an office. But the second most common cause for a claim, cancer, doesn’t care what you do for a living.

If you are like me, you also wonder about the likelihood of an insurer paying a disability claim. Will it pay promptly when you submit the proper paperwork or give you the runaround until you give up, as was the case with one insurer, Unum, several years ago?

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