Even though the chances of disability occurring are at least three to five times greater than death, most people are more prepared financially to die than to become disabled. The fact is that more than 375,000 Americans become totally disabled each year, and about eight million adults have some disability that limits or prevents them from working. Yet, approximately 110 million Americans do not have long-term disability coverage. Most workers at all income levels have spending commitments that consume 65 percent to 75 percent of normal cash flow. On the basis of these obligations, a financially responsible person should consider purchasing disability income insurance in the amount of at least 65 percent to 75 percent of normal earned income.
NOTE: While nearly half (46 percent) of all foreclosures on conventional mortgages are caused by disability, only 2 percent are caused by the homeowner’s death.