This is a question we hear quite often from our clients: Why do I need personal disability insurance? Won’t social security pay me disability benefits?

Unfortunately, most who apply for benefits do not receive them. On average, 65% of people filing claims do not receive any. For those who do receive benefits, the wait can be unbearable.

According to an article in USA Today the Social Security Administration faces a record — and rapidly growing — backlog of appeals by people who claim they are too disabled to work. Through June, it had just over 745,000 cases pending, and the wait for a hearing averaged 17 months, also a record.
Claimants in some parts of the country must wait up to 31 months, according to the agency. “People have died waiting for a hearing,” Social Security Commissioner Michael Astrue says.

The agency says the backlog doubled in six years and could reach 1 million by 2010.

In another USA Today article, they report that of 2.5 million people who file disability claims annually, nearly two in three get denied initially. If they pursue a federal hearing, they join about 745,000 others whose appeals are backlogged. As of June, their average wait for a decision was 529 days. The lengthy waits lead to bankruptcies and foreclosures, drinking and drugs, depression and divorce, even suicide, according to claimants, their representatives and employees of the Social Security Administration.

With the recent turmoil in the financial markets, we have been seeing more and more questions about the importance of the strength of the insurance company.

There are numerous factors involved in choosing a disability insurance company but the primary factor is financial strength:

• “Who is backing the claim if I get disabled?”
• “Which of my choices of insurance companies is the most likely to be there to pay me if I’m disabled for the next 30 years or so?”

How do you tell?

First of all, look at their financial strength ratings from AM Best and Co., Standard & Poor’s, Moody’s and Fitch. Make sure the company has at least an A+ rating from Best’s and AA (Aa) from the other services.

Among the disability insurance carriers we currently like the strength of Berkshire Life (a subsidiary of the highly rated Guardian Life Insurance Company).