Is Disability Insurance More Important Than Life Insurance?
Question: Throughout the lifetime of your career, are you more likely to die or become disabled?
Odds are, this is a question you’ve never asked yourself. Bear with me for the next couple minutes, and let’s consider it.
Everyone has heard of life insurance. In fact, over 50% of Americans own a life insurance policy. Life insurance provides a safety net for your spouse and children, should you die unexpectedly. If you have a life insurance policy, your family will be provided for in terms of living expenses, debt, medical expenses, and so on. This is relatively common knowledge. As the breadwinner in your family, it makes sense to purchase life insurance. Catastrophic events do occur, and it doesn’t hurt to be prepared for the worst.
Conversely, very few people have heard of disability insurance. In fact, less than 15% of Americans have disability coverage. Disability insurance is not for everyone; however, as a result of that, not many people understand what it is, or why they might be someone who needs it.
If you’re an aspiring physician, you are one of the people who need it. Not having disability insurance can lead to much more dire consequences than not having life insurance. There’s no bias in that statement, and it’s certainly not a hot-take either. It’s a fact, and I hope you didn’t hear it here first! But let’s be real, you probably did.
As a kid, did you ever fear getting struck by lightning? Every summer when the thunderstorms rolled in, would you run to your parents’ bedroom and crawl under the covers with them just to feel more safe? Maybe one day you googled “the odds of death by thunderstorm” or maybe, if you’re like me, your dad carried you to the backyard and held your hand through the nastiest thunderstorm of your lifetime to lovingly force you face your fears. We all have irrational fears that we have to overcome when we are young. Whatever the fear, whatever age, and whatever you did to overcome it, that’s a universal human experience.
As adults, we still have irrational fears. We’re no longer afraid of getting struck by lightning, bitten by a shark, or whatever it is that would cause our imminent death. We know the odds of getting struck by lightning are close to one in a million, and we can easily label that as irrational. Now, we usually label them as intrusive thoughts. We focus our concerns of mortality on scenarios a little closer to reality, such as getting in a car accident, plane crash, encountering an active shooter, and any other “what if’s” our brains can think up. While these things feel much more realistic than our childhood fears, they are still highly unlikely. Nevertheless, just to feel safe, we buy a life insurance policy.
It’s natural to have a fear of death. Again, it’s a universal human experience. I’ll admit, the idea of death is a lot scarier than the idea of becoming disabled. Therefore, it makes sense to gravitate towards buying a life insurance policy before you even begin to grapple with the thought of disability insurance.
But, here’s the catch.
You are so much more likely to become disabled throughout your career than you are to spontaneously die. Think about it. Yes, death would have catastrophic effects on your family's finances. But so would cancer, crippling anxiety, MS, a hand injury, brain tumor, heart attack or stroke, and the list goes on. All those tragedies leave you here on this Earth, just without the ability to make a living for an indefinite period of time. These are things that we generally don’t think about, and simultaneously the things that are actually worth worrying about.
The truth is, one in every five physicians will become disabled at some point in their career. As a physician, you have a 20% chance of becoming disabled for an extended period of time, stripped of the ability to work and make money. That, my friend, could be just as catastrophic as your untimely death.
Studies show that only 40% of U.S. households have enough liquid savings to cover three months of their recurring living expenses, and only 28% have enough to cover six months of those expenses. Your success and survival are incredibly dependent on your income, and income is not something you want to take for granted.
Medical expenses from unforseen injuries or conditions are the number one cause of bankruptcy in the United States. A whooping 66.5% of bankruptcies result from the inability to pay high bills related to unforeseen medical expenses and/or lost time from work.
I know what you’re thinking. Bankruptcy? Disability? It won’t happen to me. And I’m not saying it will either. I’m just saying it does. It happens. Every seven seconds, a working-age American will experience the beginning of a long-term disability. 64% of Americans already live paycheck to paycheck with their income, so I urge you, consider what your life would look like without your income.
Let’s circle back around. Are you more likely to die, or are you more likely to become disabled? You do the math. If your income is something you’re not willing to risk, head over to our website at patternlife.com/disability-insurance and request your quote today!