The government can’t take care of you. At least, not in any kind of lifestyle most Americans would find acceptable.
According to the Social Security Administration’s own actuaries, the government account that funds the Social Security Disability Insurance program is going broke, and fast. The account is now insolvent, and projections are that by the end of 2016, the SSDI program will not be able to pay promised benefits at current levels.
In fact, unless Congress intervenes, the government is going to have to reduce benefits by about 20 percent. That would result in a $218 reduction in average monthly benefits, which would have to fall from $1,146 per month to an average of $928. That pushes the average SSDI benefit to below the poverty level.
Why?
A combination of factors: Years of low interest rates have depressed the returns that SSDI can get on its own investments. Meanwhile, the sheer number of people drawing SSDI benefits has exploded. Consider: In 1966, only one adult of working age in 100 was drawing SSDI benefits. That figure had expanded to 2.3 percent by 1980, but it was still manageable, given higher interest rates prevailing at that time.
Today, nearly 1 working-age adult in 20 is drawing benefits from the SSDI program.
The increase is due to a couple of factors: The work force is aging, thanks to the demographic Baby Balloon currently working its way through the labor force. But the baby boomer population alone is nowhere near sufficient to explain the massive increase in SSDI recipients.
SSDI’s woes are compounded by a weak economy that has failed to provide jobs for millions of workers no longer included in unemployment figures because either their benefits have run out or they have become discouraged at the prospect of ever finding suitable work, and who have therefore stopped looking. In generations past, the economy was able to find a place for ‘marginally’ handicapped workers – that is, millions who had minor handicaps but who could still make a contribution to an employer.
The SSDI bubble will burst
Many of these types of workers, however, have not been able to find employment, and have resorted to SSDI as a last resort. This hurts the SSDI fund in two ways: First, they’re collecting benefits. Second, they aren’t working, and therefore aren’t contributing to the fund.
As a result, the old last-ditch SSDI safety net is about to become much less of a safety net at all.
If you need a reason to own your own disability protection and not rely on the government to take care of you, this is it. These economic trends described above are not going to go away. In fact, they are likely to get worse.
Take matters into your own hands
Individually-owned disability insurance is the only reliable option available that specifically protects doctors against loss of income due to any kind of disability, whether it’s work-related or not, that you can keep in place even if you leave your job and go into private practice.
It’s also much more likely to pay a claim: SSDI is notoriously difficult to qualify for, will not pay benefits if you are capable of working any job at all. If you own your own personal disability insurance, policy, you can select a policy that pays benefits if you have to leave your current profession. That is, you can buy a policy that pays benefits when you cannot work as a doctor – a much more favorable definition of a qualifying disability than most workplace plans offer, and certainly a more favorable definition than SSDI can offer.
Advantages of Disability Insurance
- “Own occupation” vs. “any occupation” disability definitions
- 95 percent of disability claims are not work-related, and therefore not covered by workers compensation insurance, according to www.disabilitycanhappen.com.
- Individual policies are fully portable. You can keep them in force, even if you move, change jobs, or even change careers.
- SSDI requires you to have worked a minimum number of quarters before you can qualify for benefits. You can buy private disability insurance as a medical student, and it will pay benefits even if you become disabled a week after paying your first premium.
- Much higher benefit amounts available. While SSDI and SSI, if you qualify, will only provide a subsistence level income, you can purchase nearly any amount of disability insurance, usually up to about 65-70 percent of your actual working income – even if, as a doctor, you expect your income to run into many hundreds of thousands of dollars per year.
Do you need disability insurance? Begin the process of protecting your most valuable asset – your future economic output as a physician. Don’t rely on the taxpayer to do it for you, because they can’t. But if you’re currently in reasonably good health, It’s easy to take the bull by the horns and protect it yourself. Do it now, because you don’t know what misfortune may befall you tomorrow.
Ready to protect your future?
Get a personalized side-by-side policy comparison of the leading disability insurance companies from an independent insurance broker.
