For many American workers, the period from November to mid-January is open enrollment season, when they can sign up for or renew employer-sponsored health and disability insurance plans. Though compared to health insurance, it's a valuable benefit that helps replace part of your income if you're ill or injured and can't work.
However, according to the Policygenius Disability Preparedness Survey, less than one-third (31%) of working U.S. adults currently have any long-term disability insurance (LTDI) at all, while 51% of those without disability insurance don't have it even though their workplace offers it.
At the same time, many working Americans are unprepared for an unforeseen illness or injury that makes it impossible for them to work. Twenty-six percent don't know how they would cover living expenses if they couldn't work for three years — a prospect that leaves some resigned: "I'd probably just die," one worker told .
Key findings:
- 26% of employed American adults don't know how they would cover their living expenses if they couldn't work for up to three years.
- 22% said they would either take on higher credit card debt or take out private loans to cover their expenses during an out-of-work period.
- Only 18% of employed U.S. adults are "very confident" that they could cover their expenses if they couldn't work for up to three years.
- 26% of middle-income American workers would take on some sort of debt to cover their expenses if they couldn't work for up to three years, and 45% are not confident they could cover their expenses during this time.
- 42% of middle-earning parents are not confident they'd be able to cover their expenses.
- Only 31% of employed U.S. adults have LTDI, either through their employer, a policy they bought on their own, or both.
- 58% don't have LTDI at all, and 10% aren't sure if they do or not.
- Of those who don't have LTDI, 49% say their employer doesn't offer it, while 37% of those whose employers do offer coverage didn't enroll in it because they can't afford it.
What we mean by middle income
For the purposes of this survey, middle income refers specifically to those workers with annual household incomes of $80,000 to $149,999. This spans most of the range that the defines as middle-income or middle-class: households earning between about $62,000 to $187,000 annually in 2022.
Many Employed Americans Don't Have a Safety Net if They Are Unable to WorkÂ
Roughly one in four employed Americans (26%) don't know how they would cover expenses if they couldn't work for up to three years. (The average length of a disability insurance claim is 34.6 months, according to the .) More than one-fifth (22%) would take on higher credit card debt or private loans. More specifically, 17% would increase their credit card debt, and 10% would open private loans if they were unable to work for three years.
On the other hand, 41% of employed Americans say they would live on their savings and investments, while 34% would live on the income of a spouse, partner, or another family member. Only 22% would rely on .