What is the percentage rate of people who use disability insurance in the US?
To tell the truth, most of the employees and workers in the country have little by way of private disability insurance (or if they did, the coverage may be considered inadequate to meet their family's needs).
According to a survey made by the Consumer Federation of America and the American Council of Life Insurers, of the 500 employees that were included in the survey:
- 40% didn't have coverage
- 41% have inadequate coverage, of this 41%, almost half had coverages provided by their employer
- 1% is covered with an individual disability plan
The agencies with the highest percentage of usage would be Social Security and Workers' compensation. These two are basically government-mandated coverages and there may be more, depending on the regulations stipulated in the state. There are usually state-sponsored disability compensation plans, especially for state employees.
Since the agencies that cover the most people would be Social Security and Workers' compensation, they form a huge bulk in the number of total claims for disability insurance.
According to the Social Security administration, in 2007, new claims for disability benefits increased to nearly 17% throughout the United States. This is roughly 3 million claims for the year. This number is expected to increase another 10% by 2010, resulting in 3.3 million new claims for disability benefits. The number of disability claims for workers compensation will be smaller, as this will only pay for work related injuries or illnesses, as opposed to Social Security, which will pay the benefits as long as you are able to prove disability.
The increase in the usage of disability is attributed to the following reasons:
- The increase in the number of terminations and lay-offs. Those who lost a job recently and are suffering from a disability will tend to turn to disability insurance so that they can have even at least a portion of what they used to earn.
- Emergence of "new" illnesses or the spread of such. Diseases such as cancer, HIV and AIDS have grown more prevalent in the recent times.
- Improved health care and resulting increase in life span. A country such as the United States has life expectancies of 70 years old and above. It is said that people who live this long spend an average of 7 to 8 years suffering from disabilities. Also, people are surviving trauma and disease, which in the past have been deadly. However, the result would be that people suffer from disability after the ordeal.
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