Disability Insurance for Young Adults

About Disability Insurance

Disability insurance for young adults provides valuable financial protection by replacing a portion of your income if you are unable to work due to illness or injury. It offers a safety net for covering essential expenses like rent, utilities, and bills, helping you to maintain your financial stability and long-term goals. Disability insurance is income protection insurance—it replaces your income if an injury or illness keeps you out of work for both a short and extended period. It can be more affordable to purchase disability insurance when young due to lower premiums, providing great value for young adults.

Disability insurance covers a range of short- and long-term disabling conditions, like pregnancies, musculoskeletal disorders, fractures, sprains, mental health issues, cancers, and other serious illnesses.

Disability insurance rates go up as you get older, so it’s a good idea to get a disability policy while you’re younger. That also means you’ll be covered for more of your earning years. You must have disability insurance before you become pregnant, get injured, or become ill.

Many expect older people to become disabled or ill at one point or another. What about people in their twenties? Do young people also need disability insurance? The data makes a strong case for both old and young people having, at minimum, short-term disability insurance. The benefits of disability insurance include:

Financial Stability:

  • Income Replacement: Disability insurance can provide a regular income replacement if you become disabled, helping you to cover essential expenses like rent, utilities, and bills.
  • Debt Management: It can be a crucial tool for managing student loan debt, which many young adults have.
  • Maintaining Your Standard of Living: It can help you maintain your current standard of living, especially if you are paying for a home, college, or have other dependents.

Long-Term Financial Goals:

  • Disability insurance helps ensure that retirement savings are not depleted due to a sudden loss of income.
  • It helps protect long-term financial plans, such as buying a home or paying for children’s education.

Cost:

  • Lower premiums: Generally, younger individuals qualify for lower disability insurance premiums, making it more affordable to protect their income. The earlier you buy disability insurance, the lower your rates will be. Buying disability insurance when you’re younger, means you can get the most out of your policy.

Security:

  • Having disability insurance can provide a sense of security and can allow young people to focus on their careers and personal lives without the worry of financial burden if they become disabled.

Why Young People Need Disability Insurance

Young people generally don’t think of themselves as becoming disabled, but accidents, illnesses, and injuries don’t discriminate by age. Anyone can suffer a long-term or short-term disability at any time, which is why having disability insurance is so important. Many young adults are injured playing sports, for instance. More disabilities occur outside of work. If you are no longer able to work, how will you support yourself? If you are married or have children, how will you support them?

Not worried? The time to worry about how you will pay your bills if you become disabled isn’t after you become disabled. It’s now. To put it simply, if you have a job, you most likely need disability insurance. Consider this:

  • 61 million Americans are disabled.1
  • The average Social Security benefit for a disabled worker as of February 2021 was $1,279 a month.2
  • More than one in four of today’s 20-year-olds will be out of work for at least a year due to a disability before they reach retirement age.3

How can a Long-Term Disability plan help?

A Long-Term Disability plan is designed to help you financially. If you suddenly become disabled and are no longer able to work for six (6) months or longer and support yourself or family, your Long-Term Disability coverage can help. The plan can help you pay medical co-pays, mortgage, rent, credit card bills, utilities, loans, and other everyday expenses.

Most common Long-Term Disability claims

  • Musculoskeletal disorders affecting the bones, joints muscles and connective tissues
  • Cancer
  • Injuries such as fractures, sprains, and strains of muscles and ligaments
  • Mental health issues
  • Circulatory issues such as a heart attack or a stroke

Hopefully, you will never have to reap the benefits of a long-term disability plan, but if you do, you’ll be glad you have one. Your life can change forever in the blink of an eye. Being prepared can make all the difference in the world.

How can a Short-Term Disability plan help?

Short-Term Disability insurance provides coverage from the effective date of the policy for injuries, illnesses, and pregnancy. This insurance provides you with a weekly cash benefit to help pay for expenses (such as mortgage/rent, utilities, childcare, or groceries) without relying solely on vacation days, sick pay, or your savings to stay on track with your expenses. Medical expenses and job loss are the two most common reasons individuals file for bankruptcy.1

The most common Short-Term Disability claims

  • Pregnancies
  • Musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body
  • Injuries such as fractures, sprains, and strains of muscles and ligaments, as well as digestive disorders, and mental health issues including depression and anxiety

What’s at Risk?

In February 2024, the average salary of a recent college graduate was $59,000, according to Glassdoor. Using 3% as the estimated average annual increase, a 25-year-old earning $59,000 today would see the following salaries. The likelihood of a disability lasting more than 90 days hovers around 50% for 25-year-olds to 35-year-olds. And although the probability of suffering a 90+ day disability decreases as we age, the number of months disabled increases. The assessed risk is as follows:

Age Salary Estimate Likelihood of disability lasting more than 90 days Number of months disabled Lost wages
30 $68,397 51% 55 $313,486
35 $79,291 48% 61 $403,062
40 $91,920 44% 64 $490,240
45 $106,560 40% 68 $603,840
50 $123,532 34% 74 $761,780

 

What is the Right Age to Buy Individual Disability Insurance?

While everyone’s situation is different, there are three (3) things to take into considerations to make the best purchasing decision. It usually comes down to the following three (3) factors:

  1. Earning potential
  2. Risk factors
  3. Impact of lost income

Younger adults have the added advantage of generally lower premiums but higher likelihoods of disability; older adults have the extra incentive of increased disability periods and larger income losses.

“I’m Young and Healthy. Why Would I Need Disability Insurance?”

You can always strive to stay young at heart, but you won’t always be young in years. That’s why it’s important to think about disability insurance now. Accidents and illness happen regardless of your age. Even so, disability insurance is based on your health, age, and medical history. While you are at the prime of your life right now, it may be the best time for attaining coverage.

“What Are the Chances I Have an Accident?”

Statistics show that 1 in 4 of today’s 20-year-old workers will experience disability within their career.1 In fact, the majority of disabilities are caused by illness rather than accidents. With the average long-term disability claim lasting a little under three years.5

“Why don’t I carry disability insurance?”

  • “It’s not worth the money it costs.”
  • “I don’t need it because I work in a low-risk job.”

Working in an office or other low-risk environment doesn’t make you safe from injury. Less than 5% of disabling accidents and illnesses are work-related, according to the Council for Disability Awareness, meaning it’s more likely that something could happen to you outside of work. There are certain things in life that we can’t predict. We can’t predict if we’re going to get hit by a car; we can’t predict if we’re going to have some unforeseen illness such as gallbladder disease or appendicitis.

The fact is that disabling injuries occur in the United States at a rate of every one second (Source: National Safety Council Injury Facts). The health impacts alone can be devastating, but so too can the financial effects of a disability. Did you know that more people lose their homes due to disability than fire or death, and that over half of all personal bankruptcies stem from individuals who are unable to pay their medical bills? If you wait until you’re prompted by something urgent, such as a diagnosis, your coverage could be declined.

Regardless of your age, disability insurance is a vital protection that is needed.

Key Features of Sun Life Short-Term Disability Insurance Key Features of Sun Life Long-Term Disability Insurance

Footnotes, Additional Details & Disclaimers

1 Centers for Disease Control and Prevention, ‘Disability Impacts All Of Us,’ October 2022.
2 Social Security Administration, Monthly Statistical Snapshot August 2021 Table 2
3 Council for Disability Awareness, Disability Statistics, September, 2021
4 Top 10 Reasons People File for Bankruptcy [2025 Update]
5 How long do long-term disability insurance benefits last?,” Policygenius, November 3, 2022.