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The Life Insurance Foundation for Education is a great resource for learning about the insurance world from a consumer point of view.  It is an independent non-profit that really does a great job (they do the beep, beep, beeeeepp commercials on the radio).

Every May they have DIAM: Disability Insurance Awareness Month.  Click here to learn a bunch!

 

I like Guinness. Anyone who has met me knows that that is a statement like “Mickey Mantle was a decent baseball player.” So what does this have to do with Disability Insurance Awareness Month (DIAM)? Trust me, there is a point to this that is actually relevant.

I also love to work out, especially long hard cardio based workouts, either running or martial arts. And the reward for doing the hour long, red line your engine and be ready to puke torture session workout is to have a couple of beers later. As my marathon coach (who also happens to have a PhD in biochemistry, so he knows what he is talking about), beer is just liquid bread, essentially carbs and water, so is actually good for endurance athletes.

I also give blood on a regular basis (and not just to the government through my taxes). I do this because there is demand for my blood type, and people have need that I can assist with. It’s also not that big of a deal to go and lie there for a half hour and think while you drip.

The problem is when you do all of these the same day. Having a six mile hard run in the morning, then giving blood, and having a few malted hops beverages in the evening without properly re-hydrating will wreck havoc on your body.

I woke up the next day feeling like I had gone ten rounds with Mike Tyson, in the Sahara. There was literally no part of me that was not in pain. My mouth was dry and I couldn’t do anything about it because my head spun like the kid in the Excorcist. Every time I took a drink of water it set off my stomach and it came back up (with some other stuff. Until there was no other stuff left. Then it was just dry heaving.), leaving me weak and in pain, almost ready to curl up by the toilet bowl. Every fiber of my being hurt, and I just wanted the pain to go away. We have all been here.

Chemotherapy feels like this every single day.

I have had friends and relatives go through chemo. The sickness, the weakness. Weight loss of thirty or even fifty pounds because of no appetite. The inability to focus, and depending on someone else to drive and take care of you because the side effects are so bad.

Chemo is a multi month hangover without the fun.

And that is why this is relevant to DIAM. In the past I had young people (who are invulnerable, as we all know) tell me that “I’ll just work through it if I get sick or hurt.” Until they saw a friend go through cancer and chemo. Until they saw the strongest and proudest people reduced to their knees from the side effects, unable to take care of themselves during their treatments let alone contribute economically. And not a single person whom I ever worked with as a financial adviser that saw someone go through chemotherapy ever resisted stepping up and getting disability insurance, because they have seen what it can do.

Cancer is serious stuff: I have lost loved ones to it just like practically everyone else. But I have learned the financial lessons from it. There is little we can do to prevent cancer, but much we can do to mitigate its effects financially. And buying Disability Insurance is the first and easiest step.

 

Since it’s Disability Insurance Awareness Month (DIAM), let’s explore some of the more interesting aspects of disability insurance. At least from a nerdy “I am actually a closet actuary” point of view. One thing about disability insurance that doesn’t get talked about enough is “Why do women pay more than guys?”

I have asked a bunch of insurance people about this in the past and over half were just like “duuuhhh, I dahnno.” And these are the guys that should understand it so that they can get it in their clients hands!

Without getting all uber nerdy (yes, I actually did consult some of my friends that are actuaries on this to get the real mathematically based answers), it is this simple why DI costs more for a woman than a man: because they get disabled more! I know, rocket science. But why?

One is the fact that they can get pregnant and I as a male actually can’t (no, I am not going to try and pull a Schwartzenegger). My wife was on hormone therapy for a while when we were trying to get pregnant, and it did mess up her system a bunch. Not enough to disable her, but in extreme cases that does happen. She was however on full bed rest for several months with our second kid, almost long enough for her disability to kick in. And post partum we had no issues but I know several other new mothers that have had problems, severe enough to keep them out of work for extended periods. Enough to trigger a disability claim. So that is a major reason.

Another is that guys are stupid. Yes, we are stupid enough to do stuff that could get us killed (“hey, watch this!”). We don’t become disabled from this stupidity all that often, but our stupidity and Superman complex carries over into everything else we do. Which includes believing we are invulnerable, and not going to the doctor until it is too late. So instead of becoming disabled like an intelligent female does since they go to the doctor, we men just drop dead. That is why life insurance costs more for us because we live roughly eight years less because of this.

There are other factors that can contribute to the difference in costs between male and female disability insurance, but they are minor in the grand scheme of things. So there you have it: the primer on non-sex neutral disability pricing.

Does this mean if you are a female you should just say “It’s too expensive, guess I won’t get it.” NO! The easiest way around this is to get with other people at your place of employment and purchase your individual disability from a company that offers a multi-life discount (such as Northwestern Mutual, MassMutual, or Guardian). By doing so you can get a discount that generally is large enough to cover the actuarial difference between the sexes, thus eliminating the penalty for actually taking care of yourself. Women are more likely to cooperate in this manner because, well, you’re women and do things together for the common good better than the testosterone fueled alpha males.

This video for Disability Insurance Awareness Month (DIAM) is probably one of the cheesiest things I have ever seen.  And it is spot on!

Since it is Disability Insurance Awareness Month, let’s take a quick look at how probable is a disability.

I could quote the statistics that disability is more than three times as likely as death prior to age 65, but the vast majority of people won’t understand that.  Nor is I go off on a tangent that buying disability insurance is a Pascal’s Wager (the mathematical opposite of a Fool’s Bet).  But that would be too geeky for anyone but an actuary or a degenerate gambler.

So basically here is how likely it is for you to become disabled if you are under thirty:  take a pair of quarters and flip them.  If they are both heads you lose and get to be disabled, unable to generate income, for a period of at least 90 days.  Thank you for playing, should have spent the ten bucks on disability insurance because now you are financially screwed.

DIAM

May 1

May is Disability Insurance Awareness Month, or DIAM.  It is meant to promote an understanding of the realities of disability planning, as opposed to the common myths.  And no, I am not going to go all “Myth Busters” and wrap someone in bubble wrap and drop them off a building to see if the can actually servive, even if it would be cool to do so.

One of the major reasons that disability planning is so much more important than it was even a decade ago is because of science.  That which used to kill us doesn’t anymore.  Heart attacks were once certain death, now peoplw have multiple ones like they do trophy wives.  Cancer is no longer a death sentence.  Congresswoman Giffords wouldn’t have been alive if she went through what she did two decades ago. 

And medical science just keeps getting better.  So things that once killed people ninety percent  of  the time “just” leave them disabled for months or years now.  And that is part of the reason Disability Insurance is so critical: is your nice banker going to say “Gee Phil, glad your chemo is going well.  Because I’m such a stand up guy and the bank has too much money, we’re going to pay for your mortgage until you get back on your feet.”?  Not on this plane of reality.

So Disability Insurance is there to help fill the cash void left because the doctors are doing a better job than what they used to, leaving more people alive but unable to care for themselvves or generate income.  And quite frankly I am glad for their medical advances, because it means some people I care for are still here.  And ecause of proper disability planning they can worry about getting better, not whether they can pay their mortgage.