Studies Say Nearly 50 Percent of Bankruptcies and Mortgage Foreclosures Caused by Disability

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Two studies reveal that nearly 50 percent of bankruptcies and mortgage foreclosures are caused by disability.

Two studies reveal that nearly 50 percent of bankruptcies and mortgage foreclosures are caused by disability.

A study done by Harvard University revealed that in a review of bankruptcy filings disabling medical problems led to nearly half of the 1.458 million bankruptcy filings - based on 2001 filings.

A study by the Housing and Home Finance Agency of the U.S. Government found that 48 percent of home foreclosures were the result of disability while only 3 percent of all foreclosures resulted from the death of a homeowner. This was from a 1998 study which is reflective of most years, on average.

For years, leading financial advisors have recommended a core of protection as part of sound financial planning. The disability insurance component is often overlooked. Richard Reich, with the said, “Individuals often have life insurance, homeowners insurance and certainly auto insurance but overlook insuring what is their most vital asset; their ability to earn an income. With thousands of clients through our web site and associated agencies we find that the first thought of most people with families is to have adequate life insurance which is now very easy to get online through sites like but people overlook insuring their income. Part of the reason is that there are so many fewer insurance companies marketing disability insurance because of the high potential claims. Also, most insurance agents are not trained as well in this type of insurance because their primary company usually doesn’t market it!”

With the web, one can access information and experts in the field at sites like, learn about this kind of insurance coverage and then comparison shop without having to see an agent.

Other disability statistics (among many that can be found on the web site):

1. Approximately one out of seven people who are between the ages 35–65 can expect to become disabled for five years or longer.

2. Almost 30 percent of the people who are between the ages 35 and 65 will experience a disability that lasts at least 90 days during their working careers.

3. If you put away 10 percent of your income each year, then simple arithmetic says that one year of being totally disabled could wipe out the 10 years of principal that you put into your savings.

4. About 110 million Americans do not have long term disability insurance.

The protection component of a financial plan often includes disability insurance along with life insurance, property and auto insurance. Interestingly, benefits from an employer plan are taxable.

For additional information on disability insurance and disability statistics contact Richard Reich through or .

About is a leading web site and resource on the subject of disability insurance founded by professionals with over 45 total years in the field and associated with an insurance agency that has over 10,000 disability insurance clients.


Richard Reich



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Neil Willner
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