Health and Money: Disability Insurance

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I asked Kristi (a 32 year old woman who suffers from an extremely rare

, serious and disabling neuromuscular disease called Stiff-Person Syndrome (SPS), as well as Myasthenia Gravis and Gastroparesis) while I had her on the phone, "If she knew then, what she knows now, what would she do differently?" One of the first things she said was to make sure everyone had disability insurance.

No one wants to think about being disabled, however, the reality is one third of all American's between the ages of 35 and 65 will become disabled for more than 90 days, according to the American Council of Life Insurers.

What's worse is that one in seven workers will be disabled for more than five years. This is not normally caused by a freak accident, most of the time it is caused by illness.

Disability insurance replaces a portion of your income if you become disabled and are not able to work. Check with your employer, they usually offer a group plan that will replace up to 60% of you salary. Supplemental plans and individual policies will usually cover more. Benefits usually last for a set number of years or until you reach retirement age.
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Long-term disability plans vary quite a bit. Some are wonderful and pay benefits when you need them. Others are very difficult to work with. Usually this is tied to the amount you pay for the premium monthly. Some of the cheaper ones you may inevitably find worthless.

If you are employed, you should find out if your employer provides long-term disability insurance. Then, take a good look at the policy and see if it is enough. Many group plans have a benefit cap of $5,000 per month or $60,000 per year. See what percentage of your salary it will cover, bonuses do not always make the cut. Also, check the length of time they will cover your salary, usually it is limited (i.e. two years, five years, etc.).

Many of you may be asking, what is the difference between short-term and long-term disability? Short-term disability is also known as sick leave. This starts as soon as you are unable to work, due to illness, injury or the birth of a child.

In California, employers are required to offer 52 weeks of short-term disability.

Long-term insurance starts as soon as your short-term disability runs out. However, there are no state laws requiring employers to provide long-term disability benefits.

If you decide to purchase an individual long-term disability plan, or to supplement your employer's plan, find out how much short-term disability coverage you have.

If you are self-employed or not covered by your employer, you will want to look into purchasing an individual plan. Even if you are covered, you will want to check your coverage and consider supplementing.
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Hopefully Kristie's advice will spur some of you on to look into Disability Insurance. Medical expenses are the number one reason people file for bankruptcy in the United States. I know Kristie does not want you to become another statistic.

Now is the time to prepare for the unexpected. Please take the time to read Kristie's story (http://www.carepages.com/carepages/KristieTunick/patient, you have to register, but it is easy and free). She needs your help now more than ever.

Health and Money: Disability Insurance

By: Kristi LeGue

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