June 25, 2020 | By Danielle Seurkamp – Forbes
Warren Buffett said, “only when the tide goes out do you discover who’s been swimming naked.” As Covid-19 came in, the proverbial tide went out and it exposed how few of us were prepared for an unexpected loss of income. There simply are not that many of us who can get by without our next paycheck, much less without a job.
When millions of people were drastically ejected from the workforce, the government stepped in with stimulus to keep people on the payroll and keep families afloat. It is a safety net that is only deployed when unemployment is so pervasive, and its impact on the economy is so detrimental. It is about protecting the whole, not any one individual.
Of course, as individuals, we always run the risk of losing our ability to earn a living, not only to downsizing or layoffs but to disability as well. In fact, disability is a far bigger risk than many of us realize. According to the CDC, one in four adults has a disability that impacts major life activities, such as a long-lasting sensory, physical, mental, or emotional condition that makes it difficult or impossible to leave the house and work. About 37% of people with a disability have jobs, as compared to 77% of people without a disability.
While there are some social safety nets in place like unemployment benefits or Social Security disability income, these programs are either short-lived or difficult to receive. Many people with disabilities find it difficult to qualify for Social Security disability income at all. That leaves it largely on us to protect ourselves from the potential loss of income resulting from a disability.
Fortunately, many employers provide long-term disability insurance to their employees, either as a company-paid benefit or as a voluntary benefit paid for by the employee.