This article by Timothy W. Emery, Esq., a partner with Emery Reddy, PLLC, Attorneys at Law.

Of the many concerns that today’s workers face, one of the most troubling is the prospect of losing income during an injury or prolonged illness. Sick or injured workers may suddenly find themselves unable to pay bills, maintain their current standard of living, protect their families from debt, or even keep their homes.

While most Americans carry insurance for possessions like cars and homes, the majority do not carry private disability insurance. At first glance, this makes it easy to see why someone would insure his or her ability to work and earn income—perhaps an individual’s most valuable asset of all.

Yet the issue becomes more difficult when workers try to determine the actual risk of experiencing disability in the course of a working lifetime. Much of the existing data and information is confusing, contradictory, or downright misleading. For example, the National Safety Council estimates that 31 million American workers suffer from a disabling injury each year; but when you look closely at the details, that figure is anything but straightforward. The NSC defines “disability” quite loosely: in a recent interview, NSC spokesperson Amy Williams noted that a disability could be anything that “interferes with normal daily activity one day beyond the day of injury.” She clarified that the condition doesn’t have to be serious enough to prevent an individual from going to work: in fact, it could just mean that someone “twisted their ankle and couldn’t go to Pilates that night.”

Such concessions, however, do not stop insurance companies from playing fast and loose with the statistics, as Ron Lieber argues in his recent article, “The Odds of a Disability are Themselves Odd.” For example, Lieber points out that the Council for Disability Awareness, a consortium of disability insurance companies, draws on the above NSC figures to claim that Americans have an 80% chance of experiencing disability. Framing the discussion in this way invests the prospect of disability with a sense of inevitability—and, consequently, sells insurance policies.

Of course many workers have legitimate reasons for insuring their ability to work and earn an income, even if insurance industry figures are overblown. Yet given the gaps and inconsistencies in available data on an average worker’s odds of experiencing disability, policy-shoppers should be wary. Reputable disability insurance agents may cite more conservative odds—perhaps as low as 50%. But some assessors in major insurance firms like Guardian will admit that those figures themselves are still inflated. During a recent interview, the spokesperson for Guardian’s Berkshire Life unit revealed that her organization’s current information was outdated, and estimated that the odds of disability were probably closer to 30%. Estimates on websites for insurers like Metlife as well as the U.S. Social Security Administration concur with that lower figure.

Yet workers who want to make informed decisions about the actual value and necessity of purchasing disability insurance will need to consider other factors in order to accurately assess their risk. The website for the Council for Disability Awareness provides a “Personal Disability Quotient” tool to estimate the odds for different occupations and lifestyles, but there can be substantial discrepancies in the results when additional outside factors are calculated. White-collar workers have lower rates of injury and illness than their blue-collar counterparts; exaggerated or fraudulent claims skew actuarial data across the board; and in recent years, many professionals facing reduced income and benefits have increasingly turned to using their disability policies as a kind of retirement plan—a trend recently verified by Jack Luff, a researcher with the Society of Actuaries.

Given this ever-shifting constellation of factors, the lifetime disability odds for a given worker could turn out to be in the single-digits—a figure that is hardly suggested by the Council for Disability Awareness, which warns that “Every :01 second another disabling injury occurs. That’s 60 per minute, 85,000+ each day.”

Workers can expect to find more accurate information on the website of the U.S. Bureau of Labor Statistics, which regularly updates its figures on disability rates and coverage. And of course a number of employees already have some disability coverage through their workplace—although the Bureau of Labor Statistics shows that this is only true for about 30% of American workers, and those policies generally cover only a portion of a worker’s income and tend to run out quickly. One should also bear in mind that workers’ compensation and L&I benefits can only be received for injuries that occur on-the-job. Meanwhile, disability benefits through Social Security amount to only a few thousand dollars a month, and the Social Security Administration defines disability very narrowly in evaluating eligibility.

Whatever a worker’s concern, it is clear that one should not solely rely on generalized insurance industry figures and across-the-board warnings. Those who are considering disability coverage face considerable research challenges, but Ron Lieber’s New York Times article has already generated a lively online discussion, and offers a number of additional resources for help. The guidelines in his blog post Questions to Ask Before Buying Disability Insurance may provide workers with an excellent place to start.

For more information, please visit Emery Reddy, PLLC online, or contact us via telephone at (206) 442-9106.

Emery Reddy represents plaintiffs in L&I, employment law and personal injury matters. The firm and its attorneys are trusted advocates for Washington workers who experience job related injuries.