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Why Disability Insurance is Important

  • Published: 2009-03-14 (Revised/Updated 2014-03-14) : Author: Carolyn Magura
  • Synopsis: Explains the importance of having adequate disability insurance coverage in your life.

Main Document

"More than 10.5 million people are starting their own businesses, consulting or working at home, according to the Bureau of Labor Statistics."

When you have a disability of any type, your time, energy, and emotions are all heightened as you begin the journey to learn all you can so that you can regain the best quality of life that you can, given your particular circumstances.

If you are married, and/or if you have children, trying to communicate with them what is going on with you, as well as to your doctors, becomes a difficult chore also.

With all of this chaos in your life, the absolute last thing that you need to worry about is money! What if I can't work any longer? How will the bills be paid

Perhaps you are saying that you do not need any disability insurance.

Consider the following.

Disability Statistics

The odds of a person having at least one long term disability (LTD) that lasts three months or longer before that person reaches age 65.

DISABLED: (1999) According to the Disability Management Sourcebook, the number of folks between 17 and 44 with severe disabilities has increased 400 percent over the past 25 years. One in seven people will become disabled for five years or more before they reach 65.

ODDS, STATISTICS AND DISABILITIES:

The likelihood of needing LTC (obviously) increases with age.

Reasons People Take STD and LTD

Leading the list of Top 5 causes of short-term disability (STD) workplace absence for 2001 was pregnancy (normal), followed by complications from pregnancy, injuries (excluding back), back conditions and digestive/intestinal conditions. The causes of claims and the percentage received for each cause were as follows:

The primary sources of disability insurance are STD and LTD. It is important to see if your company offers these insurances. If they do, make sure that you are covered. If they don't, you can get personal STD and LTD. By visiting the following website, you can get more information about disability insurances.

How Much Disability Insurance is "Enough"

Research shows the following about employer-offered STD (short term disability) and LTD (long term disability).

If you have already read the other blogs about Disability insurance, you know how important it is to know about what types of insurance you have, and how much each insurance will pay out, if and when you need it.

Now, you know how much your STD and LTD will pay out each month. The question is, how much SHOULD YOU HAVE

There are some simple ways to determine just how much is "enough", and it varies for each family.

1) Sick leave - maintain at minimum 5 days, and, at best, 10 days. In this way, you will be able to meet a usual time gap before your STD kicks in.

2) STD - most STD policies cover up to 26 weeks. To make sure that you have "enough" STD TIME coverage, the weeks should cover your LTD's elimination period.

3) LTD - time-wise, you will want your LTD plan to cover you until your retirement age. (Note, not all retirement ages are at 65. The retirement ages are increasing; make sure that you know your specific retirement age.)

Now, let's talk about money. To calculate how much money is needed by you and your family, consider the following.

For each month, note the following.

1) OUTGO Your "must pay" expenses (including, but not limited to the following: house payment; utilities; car and gasoline; medical expenses; any child care; any loans, credit cards, etc.)

2) INCOME ON DISABILITY Add together any income other than yours (i.e., spouse's income) plus whatever you will receive on a monthly basis from your company-paid STD and/or LTD. Add to this amount whatever savings you have, and how long this would last.

The gap between income on disability and outgo would be the amount of income that you might want to offset with a private LTD policy.

WHY THE NEED FOR DISABILITY INSURANCE BENEFITS

What are the odds: in the next hour 194 people will be injured in car accidents, 57 homes will catch fire, 230 people will die, and 1,027 will become disabled.

Here are the latest disability trends that concern you.

Aging is a main factor.

Changing workforce

Increase in workplace disabilities

Reference: About Disabilitykey.com & Carolyn Magura: www.disabilitykey.com is a website designed to assist each person in his/her own unique quest to navigate through the difficult and often conflicting and misleading information about coping with disabilities. Carolyn Magura, noted disability / ADA expert, has written an e-Book documenting the process that allowed her to:

a) continue to work and receive her "full salary" while on Long Term Disability; and

b) become the first person in her State to qualify for Social Security Disability the FIRST TIME, in UNDER 30 DAYS.

Similar Topics

1 : Survey Reveals Americans Underestimate Risk of Disability : Anthem, Inc..
2 : Things to Consider When Buying Disability Insurance : www.protectyourincome.com.
3 : Income Protection for Medical Residents and Fellows : Secura Consultants.
4 : Dealing with ERISA When it Comes to Eating Disorders : Kantor and Kantor .
5 : Canadian Workers Not Prepared for Financial Impact of Disability : RBC Insurance.
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