Millennials Aren't Invincible: 3 Crucial Reasons Gen Y Needs Disability Insurance

If you are a millennial, it's hard to imagine being out of work for months because of a long-term injury or illness. You're young and healthy, so what do you need disability insurance for

Although workers, especially in the millennial generation, believe the probability of being in a debilitating accident is slim, they are severely underestimating their risk of becoming disabled - one of the biggest financial mistakes they could make in their young lives.

However, many millennials do not know about ways to protect their income, including disability insurance. According to a Council for Disability Awareness 2014 survey, 40 percent of millennials would think about having income protection if they were more cognizant about their options.

In commemoration of Disability Insurance Awareness Month, here are three reasons millennials need disability coverage:

1. Millennials Will Make Up 75 Percent of the Workforce in a Decade

The millennial generation is entering the job market at rapid pace and employers should be prepared. By 2025, millennials will account for 75 percent of the global workforce, according to Deloitte.

Not only do small-business employers want to develop these workers to become productive members of the company, they also want to ensure staff productivity levels are high by staying healthy. If a percentage of millennials were out of work because of a disability, this could have huge macroeconomic implications for households and the state of the job market.

Young workers will likely have a greater need for disability coverage as they make up more of the workforce.

"The No. 1 reason for long-term disability leave among millennials was pregnancy."

2. Gen Y Puts More Emphasis on Health Than Other Generations

At the same time companies are increasingly investing in wellness and fitness programs for employees, giving workers the option for disability insurance could be the next step so they're also healthy financially. PwC noted that millennials are changing how employers approach health care benefits by working with companies to provide more health and well-being services. 

The leading cause of work absences might also play a role in whether millennials demand disability insurance. 

A survey by Unum Group revealed the No. 1 reason for long-term disability leave among millennials was pregnancy, including pregnancy complications. Whether their employer offers paid maternity or paternity leave or not, millennials must plan ahead in case they will have to foot their household bills themselves while they are not working to care for their newborn or recovering from labor.

Additionally, millennials are becoming older and will likely be more prone to other major injuries and illnesses, such as joint disorders or musculoskeletal conditions, that could put them out of work for a long time. 

3. Disabilities Could Quickly Grow Debt Levels

Gen Y ranked income protection higher than older generations, according to CDA, and this could be due to their current financial situation. Coming into the workforce, millennials might already have a huge amount of debt to carry. The average student loan debt was $33,000 for 2014 graduates - the highest ever for any class, The Wall Street Journal reported.

Already having a high level of debt and lacking a way to protect their income, millennial workers will likely face financial hardships. This means that millennials might have to resort to other ways to generate money, such as taking out loans or charging items to credit cards, which could further pile on debt.

Disability coverage could also give millennials something they crave: financial independence. The CDA survey showed millennials were more likely to ask their friends and family for help during a disability. Through disability coverage, millennials will receive money for their claims directly from a trusted insurance company rather than ask for help elsewhere with the risk of being rejected.