What is Disability Insurance?

Disability Insurance is an income protection policy that provides monthly benefits to supplement the loss of wages during an unforeseen injury or illness. Disability Insurance is designed specifically to help cover those basic expenses while your clients recover from an illness or injury and protect the things that are most important to them.

If your client loses income for an extended period, how will that time gap affect their home, their family, and their savings and retirement? Without a plan or disability insurance product, a family could lose their home and put a strain on their budget to make ends meet. Some people think of disability insurance as “paycheck protection.”

Disability insurance functions like many other insurance policies in that your client pays a set amount at regular intervals and in exchange, he/she receives benefits if he/she uses the policy. The monthly benefit can help protect their home since a mortgage or rent payment is often a significant monthly expense.

Each client’s situation is different. AIPMA has an experienced Business Development team to discuss product differences, answer questions, and generate illustrations to help you show disability insurance product options to your clients. Contact our Business Development Team at (800) 783-5206, Prompt 2 or marketing@aipma.com.

Disability Insurance Statistics

• According to the Centers for Disease Control and Prevention, more than one in four U.S. adults (28.7%) live with at least one type of disability.
• Typically, the reason people can’t work is because of illnesses (96.2%), like cancer and stroke, rather than injuries (3.8%).*
• The most common reasons for short-term disability claims include, but are not limited to: musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body (17%); injuries such as fractures, sprains, and strains of muscles and ligaments (11%); mental health issues including depression and anxiety (10%); and digestive disorders such as hernias and gastritis (7%).**
• The most common reasons for long-term disability claims, include, but are not limited to: musculoskeletal disorders (26%); cancer (15%); injuries such as fractures, sprains, and strains of muscles and ligaments (11%); mental health issues (9%); and circulatory disorders, such as heart attack or stroke (9%).**
• Workers’ Compensation only covers time away from work if the disabling illness or injury was directly work-related. Less than (1%) of American workers missed work due to an occupational illness / injury.**
• Only (30%) of Social Security Disability Insurance (SSDI) claimants had their disability application approved – and it generally takes three to five months from the time of application for SSDI benefits to get an initial decision.**

*Source: Calculated with data from the “Annual Statistical Report on the Social Security Disability Insurance Program, 2023”. U.S. Social Security Administration, Office of Retirement and Disability Policy, Office of Research, Evaluation, and Statistics. Released 10/2024.

**Source: Council for Disability Income Awareness