Cancer and the Healing Power of Community (Video)

We write about financial, physical, and emotional wellness, and the steps that working Americans can take the strengthen their resilience and protect their income. Below are the few select posts checkout our full blog here.

Cancer and the Healing Power of Community (Video)

May 21, 2018
By Council for Disability Awareness
DIAM, Disability Insurance, Protect Your Income

It started with what seemed to be a sinus infection. “But it just wouldn’t go away,” remembers Lisa Gohra. So she went to see her doctor. He put her through a series of tests: ultrasounds, chest X-rays, CAT scans, needle biopsies. Then the diagnosis arrived: Advanced Papillary Thyroid Cancer with a tall cell variant. The variant made an otherwise treatable cancer very aggressive. In a moving video that the American Cancer Society created this spring (watch below), Lisa Gohra .. more »

How Should HR Leaders Approach Mental Health in the Workplace?

May 17, 2018
By Carol Harnett Living with Disability, Workplace

This article originally appeared in Human Resource Executive in the summer of 2017 — we're reposting it as May is both Disability Insurance Awareness Month and Mental Health Awareness Month. This column is not the one I planned for you to read today. A .. more »

This article originally appeared in Human Resource Executive in the summer of 2017 — we’re reposting it as May is both Disability Insurance Awareness Month and Mental Health Awareness Month.

This column is not the one I planned for you to read today. A computer-system update gone wrong drove me to write a new post on a different topic (since my electronic notes perished as well). But I’d like to believe I would have asked my editors to allow me to switch topics at the last minute even if this didn’t happen.

Why? Because on 20 July 2017, Chester Bennington, the ferociously-talented lead singer for the rock band Linkin Park, committed suicide. The act was made more poignant since it’s thought Bennington mimicked the recent death of his close friend (singer Chris Cornell) on what would have been Cornell’s 53^rd birthday.

Bennington wasn’t alone in his desperation. According to the American Foundation for Suicide Prevention, approximately 121 people in the United States died by the same method that day – and 3,025 people attempted suicide.

Depression — the usual precursor to suicide — is the leading cause of disability worldwide and a major contributor to the overall global burden of disease. In the U.S., depression is a top-five cause of both short- and long-term disability absences. (Musculoskeletal claims are the leading cause of long-term disability.)

In an interesting comparison, Ian Bridgman of The Claim Lab indicates that in Canada (where long-term disability policies do not carry a 24-month-mental-health limitation) mental health diagnoses are the number one cause of employee absences lasting more than three months.

How should HR respond to mental health issues?

Given all this information, I find myself reflecting upon whether I’ve done enough to reach people who struggle with depression or anxiety disorders – or, as importantly – HR leaders who can make a difference every day in employees’ lives.

While I share a great deal of information about mental health via , I realized the last time I covered the topic here was in 2011. That column was in response to the Screen Actors Guild abandoning mental-health benefits for its members.

I doubt I’ve saved or comforted a single soul by posting the phone number for the suicide-prevention hotline on my Facebook wall or in my Twitter or LinkedIn feed, and something similar can be said about companies that simply offer an employee-assistance program and consider the topic addressed.

So, what’s an HR executive supposed to do about the workplace and mental health?

Normalize the conversation

We can look for guidance from people like Ben Congleton, CEO of Olark Live Chat, whose support of employee, Madalyn Parker (who took two days off from work to focus on her mental health) went viral.

Congleton seemed astonished by the response, and used his momentary fame to articulate the opportunities offered to employers on how to “normalize mental health” as a general health issue.

Build a safe space for employees where they can feel vulnerable and are willing to share any issues, whether they are related to mental health or not.
Reflect on how your company’s values support this safe space for your employees – one in six of whom is taking a psychiatric drug for a mental health issue.
Provide paid leave for mental and physical health issues – whether it’s in the form of traditional sick leave, salary continuation, paid time off, or short-term disability.
Take time to express gratitude to your employees.

Parker presents two additional considerations that are helpful from an employee perspective:

Offer flexible work arrangements.

Educate staff through training programs like Mental Health First Aid at Work to increase understanding and supportive behaviors about mental health in the workplace.

HR offers a first-line of assistance to employees

I’ll end with a few thoughts of my own:

Consider providing a more generous bereavement policy for employees who lose a loved one for any reason. Two or three days of paid leave is barely enough time for a worker to bury a loved one, never mind recover from the experience.
Keep in mind that your employees are also impacted when their dependent or loved one is suffering from mental health issues. Contemplate ways to assist employees, especially if a dependent dies by suicide.
If your company offers an EAP, stay updated on the utilization rate. I led a research project on the impact of employee assistance programs on absence and return-to-work rates. We found the only time EAP made a statistically-significant difference on the length of an employee absence was when the overall company utilization rate was over 10 percent.

Mental-health issues are pervasive throughout the U.S. and global populations. Employers, and HR leaders, are a first-line of assistance to the nearly 150 million working Americans.

How Many Working American Households Lack Private Disability Coverage?

May 3, 2018
By Andrew Melnyk DIAM, Disability Insurance, Insurance, Protect Your Income

By Andrew Melnyk, Chief Economist and Vice President of Research, American Council of Life Insurers Last week, Fred Schott of The Council for Disability Awareness outlined an approach to answering the following question: how many working Americans have (or don’t have) some form of private disability .. more »

By Andrew Melnyk, Chief Economist and Vice President of Research, American Council of Life Insurers

Last week, Fred Schott of The Council for Disability Awareness outlined an approach to answering the following question: how many working Americans have (or don’t have) some form of private disability coverage?

It is an important question because, as we know, Social Security Disability Insurance (SSDI) does not provide sufficient protection for most families. The American Council of Life Insurers (ACLI) can provide another way of answering this question.

In September 2017, the ACLI issued a report titled Assessing Americans’ Financial and Retirement Security that was based on extensive survey data. The data was gathered with respect to households, and not individuals — the same approach the Federal Reserve takes in its periodic Survey of Consumer Finances. One of the questions asked (but not directly addressed in the report) was whether anyone in the surveyed household was covered by a private disability insurance policy, issued on either a group or individual basis.

What is the definition of ‘household’?

Here’s how ACLI (along with the Federal Reserve and other entities that track consumer data on this same basis) categorizes households:

Per Census Bureau data, there are a total of 125.8 million households in the U.S. Our data indicates about 31.4 million (25 percent) of those are “retired” and the remaining 94.4 million (75 percent) are “non-retired.”

A handful of “retired” households may still have some kind of attachment to the labor force — for example, a two-person household where one partner works 20 hours per week in a post-career job and the other is fully retired.

Because entering retirement is increasingly a multi-stage process rather than a specific date (i.e. more people are easing into it, perhaps by working part-time), that handful is likely to get larger. But that said, let’s make a simplifying assumption that disability coverage is applicable only to the “not retired” households.

The answer: 51.3 million

Our survey data revealed that less than half (45.7 percent) of “not retired” households have some form of private disability insurance. So, 43.1 million households in that category have at least some coverage. But more than half, some 51.3 million, don’t have access to private disability insurance. The latter number is very much in the same ballpark as what Fred came up with in his post.

To learn more about disability insurance and how it protects your income, visit RealityCheckup.org

The Top 5 Reasons Why People Go Out of Work and Stay out of Work

April 30, 2018
By Council for Disability Awareness DIAM, Disability Causes, Disability Insurance, Protect Your Income

At least 35 percent of working Americans don’t have private disability insurance. And what that means is approximately 50 million people won’t receive a paycheck if they leave work to have a baby, or are recovering from an injury or an illness. Working adults .. more »

Working adults need disability (or income protection) insurance because people regularly leave work for short — or even long — periods of time. About 70 percent of full-time employees have sick days or vacation time they can tap into for short absences, but you could become financially strapped if you need more than five or 10 days off.

Depending upon the type of industry where you work, six to 10 percent of people are out of work long enough that they file a short-term disability claim (insurance that covers the first three to six months of your time off). Seventy-five percent of these people are out of work up to 75 days, and the rest can be out for 180 days or a year.

Meanwhile, the Social Security Administration says that more than one in four of today’s 20-year-olds will be out of work for 12 months or more for a variety of reasons before they retire.

Here are the top five reasons why people are out of work for three months or longer (according to a database representing long-term disability claims from a large group of disability insurance carriers):

1. Pain in your back and joints (aka musculoskeletal disorders)

Knees battered by too much hard running, ligaments torn on the ski slopes or from chasing kids, and back pain from too much time spent sitting, lifting or gardening: These are all examples of musculoskeletal disorders that are responsible for a nearly third of all long-term disability claims.

These results are consistent with information from the 2016 Social Security Disability Insurance database. If you want to try to prevent these type of injuries, shore up your body’s strength by engaging in exercise, eating healthy, and being very aware of repetitive movements you undertake everyday. Repetitive motion can include activities like driving to work and playing tennis.

2. Cancer

American adults have a one-in-three lifetime chance of being diagnosed with cancer, according to the most recent data from the US National Cancer Institute’s Surveillance Epidemiology and End Results (SEER) database. We see this risk reflected in LTD claims where cancer is in the second leading reason why people are out of work for three months or longer (15 percent of all claims). It’s important to know that it’s treatment for cancer — not the condition itself — that causes people to leave work temporarily.

Cancer can arise from endless possibilities, from your genetic makeup, to the environment around you, to your lifestyle. The Mayo Clinic recommends seven key ways you can build up your body’s defenses against cancer: avoid tobacco, eat a healthy diet, maintain a healthy weight and be physically active, protect yourself from the sun, get immunized, avoid risky behaviors, and get regular medical care.

3. Complications of pregnancy

Many people are surprised to see pregnancy listed as a cause of disability claims. In fact, it’s the number one reason why people file a short term disability claim. Women are typically paid six to eight weeks of disability benefits after they give birth to a child.

There will be times when a woman’s physician will determine that, for her own health and that of her baby, she needs to stop working in advance of delivery. In most cases, that pre-delivery absence iscovered as well.

But why would pregnancies show up as a top reason for long-term disability?

“About 50 percent of LTD plans have a three-month waiting period (also known as an elimination period), while the other half of plans have a six-month period before benefits are payable,” explains Fred Schott, Director of Operations at The Council for Disability Awareness. “A STD plan, sick days, or paid-time-off bank often covers all or part of the long-term disability elimination period.”

Schott says that three-month waiting period plans are common in industries such as education or healthcare, where more women work. This results in more pregnancy claims being filed.

“If delivery complications cause a woman to be out of work for more than six to eight weeks — or if pregnancy complications lead to her leaving work several weeks before delivery,” Schott says, “It increases the likelihood she’ll go beyond the three-month waiting period and she will receive LTD benefits. But the length of LTD pregnancy claims is very short — a few months at most.”

4. Mental health challenges

Mental health is a critical issue in the United States and across the globe. Depression is now the leading cause of disability worldwide according to the World Health Organization. And the National Alliance on Mental Illness shares that 20 percent of American adults will experience a mental illness.

Mental health challenges — including depression and anxiety disorders — account for 9.1 percent of long-term disability claims. The numbers of those who are struggling could be much higher, however, as there is a tendency for depression to go untreated, or to be associated with a physical cause for disability that goes uncounted as a result.

One or two disability carriers measure their causes of disability in a different way than the majority of the industry. They often split up musculoskeletal disorders into a series of separate categories. While there is nothing essentially wrong with this approach, it often pushes mental health out of the top five drivers of absence and disability. This analytic technique further masks the importance of addressing mental health issues in and outside the workplace.

Non-profit organizations in the U.S. and the U.K. are trying to tackle mental health by encouraging people to talk openly about how they are feeling with people they trust. You will often see these efforts in social media attached to #oktosay or #okaytosay.

5. Accidental injuries

Finally, we come to accidental injuries, which ironically enough is what many people assume is the most common cause of disability claims. This category includes injuries such as fractures, sprains and strains of muscles and ligaments and ranks as the fifth most common cause of longer-term absences at nine percent. Preparing to avoid mishaps is difficult — that’s why they’re called accidents! — so it’s important to have disability insurance in place in the event that an accident occurs.

So what should you do with this information?

Disability insurance protects your income if you need to miss work in order to have a baby or recover from everything from back pain, to a broken leg, to treatment for cancer. By knowing the main reasons why people leave work for longer periods of time, it soon becomes clear that illness and injury is far more common than most people realize.

This begs the question: If your pregnancy became unexpectedly complicated, you needed to take time off work to heal from an injury or illness, how would you pay the bills while you recover?

Learn more about how to protect your income at RealityCheckup.org

5 Frequently Asked Questions About Disability Insurance

March 19, 2018
By Council for Disability Awareness Disability Insurance, Facts, Protect Your Income

Disability insurance provides critical financial protection to American workers. Yet it’s a highly misunderstood form of insurance. You probably have health insurance, home or renter's insurance, and car insurance. But what about your need for income protection insurance? Disability insurance pays you a portion of .. more »

Disability insurance provides critical financial protection to American workers. Yet it’s a highly misunderstood form of insurance. You probably have health insurance, home or renter’s insurance, and car insurance. But what about your need for income protection insurance?

Disability insurance pays you a portion of your income when an injury or illness takes you out of work for an extended period of time. It’s a critical form of insurance for most working Americans — because it means if you have to miss work for weeks or months at a time, you will have a financial safety net in place to help cover the bills.

Here are six frequently asked questions about disability insurance:

1. Do I really need it?

Most people hear the word “disability” and assume this form of insurance only applies to very serious injuries and illnesses — yet many common injuries (like fractures) or chronic conditions (like back, hip, or knee problems) can result in your not being able to do your job and earn a paycheck.

According to the U.S. Social Security Administration, more than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of some disabling condition before they reach age 67 (the normal retirement age). Will you have an ability to pay your bills if you need to miss work for several months? If you don’t have access to that much in emergency savings, or friends or family that can help pay your bills when you need to take time off work, disability insurance makes a lot of sense.

2. What’s the difference between short term and long-term disability insurance?

Short-term disability (STD) insurance plans generally protect your income for up to three or more commonly six months. Some plans can run even longer than that. Short-term plans typically cover between 60 and 70 percent of your pay, depending on the policy.

Long-term disability (LTD) insurance protects your income if you need to miss work for longer than three to six months. It usually covers 40 to 70 percent of your income. It costs more than short-term disability insurance because it’s a policy that will protect you for a significantly longer time. The time your coverage pays benefits will range depending on your policy. It can be for a specific period — ranging from two to five or ten years — or until your Social Security retirement age. The waiting period for most LTD policies is three or six months — so you’ll need a plan to cover costs before the payments begin (usually this time is covered by your STD plan or your savings.)

3. Does disability insurance cover all disabilities?

Every plan will have its own definition of disability, so you’ll need to review the definition in your particular policy. In general, many policies do not include the following disabilities:

A disability resulting from participation in a riot
Injuries which are intentional and a result of self-infliction
War or any act of war
Any period of disability during incarceration
A disability resulting from a crime in which the individual has been convicted
Pre-existing conditions (definition varies by policy)
For short-term disability: occupational sickness or injury (as this is generally covered by Worker’s Compensation)

4. Can I work part-time and still collect benefits?

Your insurance contract will specify if you can receive benefits while working part-time. Many policies allow you to work, but take the amount you earn and subtract it from your benefit. If your policy has a lifetime benefit cap, working part-time may extend the life of your benefits.

5. How much disability insurance should I get?

Insurance companies typically do not sell disability insurance policies which replace all of your income. But, they do sell policies which can replace up to 70 percent of your income. If your employer does not offer a disability plan with 70 percent coverage, you may want to look for supplemental insurance coverage to offset the difference.

One major benefit of owning your policy: When you pay premiums yourself, you are paying with after-tax dollars. Therefore, any benefits will likely be tax-free. Tax-free benefits paying 70 percent of your income comes close to being 100 percent of your take-home pay. If your employer pays the premiums and the cost is not included in your taxable income, then benefits will likely be subject to taxation.

A good rule of thumb is 70 percent coverage, but, as with all insurance needs, it depends on your circumstances and what you can afford. Regardless, seek out a qualified advisor if you need help crunching the numbers.

Disability insurance is a good idea

Just think how devastating the loss of income would be for you and your dependents. Then think how much worse it would be to lose the ability to earn an income. This is a circumstance you can avoid with proper planning and an action plan.

Home Ownership and Disability: What You Need to Know

March 5, 2018
By Council for Disability Awareness Disability Insurance, Insurance, Millennials, Personal Finance, Plan, Protect Your Income

Buying a home can be one of the most exciting experiences that life has to offer, especially when all the stars seem to align. As consumer confidence continues to build and mortgage rates continue to fall, the housing market is seeing an uptick—especially among millennials. While buying a home can surely be an exciting experience, it can also result in a great deal of stress and anxiety. Add to this the potential that you or a spouse may become disabled, and it becomes clear that the joys of home ownership often come along with a cluster of downsides that cannot go overlooked.

Not sure how disability could potentially affect home ownership? Here are a few things to bear in mind.

The Risk of Disability with Home Ownership

As people mature and responsibilities begin to grow, it eventually becomes clear that at least some amount of focus needs to be placed on the protection of assets. Whether it be bank accounts, physical belongings or otherwise, most people take steps to ensure that they’re covered in the event of an emergency. While this is generally recognized as a positive approach to life, it doesn’t take into consideration the importance of protecting the income that allows said assets to exist in the first place.

For various reasons, many people simply don’t realize just how much of an impact an illness or injury may have on their income. While being out of work with the flu may be enough to derail things for a short period of time, a lengthy absence of three months or more can be disastrous, as mortgage defaults and bankruptcies often come as a result of not being able to make a living due to disability. In fact, according to the U.S. Housing and Home Finance Agency, nearly half of all home foreclosures are due to disability and and loss of income.

Add to this the fact that one-third of all 30 year olds will experience a disability that affects their career for at least three months, and the reality of the situation becomes impossible to ignore.

What You Can Do

No one wants to spend their life worrying about potentially losing their home due to illness or injury. But playing it overly safe and never taking risks may not be realistic, and avoiding sharp turns in life is nearly impossible. Fortunately, disability insurance can help to alleviate these anxieties and protect your home should you ever experience a significant disruption in work. For most, It’s one of then most realistic ways to defend against the randomness of life.

Home ownership is a dream for millions of people throughout the world. The more you can do to protect you and your family after closing, the more likely it is you’ll experience peace of mind and enjoy turning your house into a home.

4 Things to Know About Family Leave and Your Income

February 16, 2018
By Council for Disability Awareness Disability Insurance, Plan, Protect Your Income

Becoming a parent is an extraordinary and, at times, stressful endeavor. Your life is about to fundamentally change. And as you plan the myriad dimensions of this new reality, you may be wondering how you'll cover all the bills while you take time off work. .. more »

Becoming a parent is an extraordinary and, at times, stressful endeavor. Your life is about to fundamentally change. And as you plan the myriad dimensions of this new reality, you may be wondering how you’ll cover all the bills while you take time off work.

Family leave is a complex issue and it requires a good amount of research. Begin by reading your employer handbook or asking a co-worker how they dealt with family leave and what they were offered. Consider what will work best for you, in terms of the time you’d prefer to take off work. If you do become pregnant, make sure you let your boss know before anyone else. Embrace it enthusiastically as an opportunity for growth. As Carol Walker, president of the consulting firm Prepared to Lead tells the Harvard Business Review: “Planning for your maternity leave is an opportunity to demonstrate to everyone that you’re in the game.”

Here are a few ways you can replace your income during family leave:

Paid Family Leave

This is the ideal situation of course, but don’t hold your hopes up too high. The National Compensation Survey (NCS) conducted by the Bureau of Labor Statistics, revealed that just 14 percent of civilian workers had access to paid family leave in 2016. There are a few states who are pioneering paid leave: These include California, New Jersey, and Rhode Island, and New York joined the group in January 2018. If you work in the tech industry, you could also be in luck: Tech companies offer some of the best family leave out there. Ask your HR team or boss if they offer this benefit.

Short-Term Disability Insurance

Short-term disability insurance is another way to protect your income when you cannot work due to an illness or injury. This includes pregnancies — and it’s very commonly used for this purpose by employers. Short-term disability insurance plans often cover six weeks post-partum. It covers a portion of your income — normally around 60 percent. Several states such as New York, New Jersey, Hawaii and Rhode Island have short term disability laws in place. You can also purchase this form of insurance as an individual.

Unpaid Family Leave

The vast majority of American workers don’t have access to paid family leave (88 percent according to the NCS study). So your next step is to see if you qualify for unpaid family leave — which keeps your job intact although it doesn’t offer a salary. The federal Family and Medical Leave Act (FMLA) was signed into law in 1993 and it guarantees eligible workers up to 12 weeks of job-protected, unpaid leave per year. FMLA does have its limitations though: it only applies to companies that have more than 50 employees within 75 miles of your workplace. You also need to have worked there for at least a year and put in a minimum of 1,250 hours. Laws around this also vary from state-to-state so you’ll need to research your local situation. FMLA applies to giving birth, adopting a child, or fostering a child — and it can also be used in the cases of caring for a spouse or parent with a serious health condition. There are ways of making it work while on unpaid leave—you just need to plan well.

Paid Time Off (PTO)

Many people will use some of their PTO to cover their income for part of their leave. Your workplace may require you to use up your accumulated PTO before benefits can kick in. Others will allow the benefits to begin immediately, which may allow you to use some of your PTO to extend the length of time you can stay at home.

Take the time to educate yourself on the benefits that apply to you. Know your rights and don’t be afraid to try to negotiate a better deal. If you are just starting to think about having a child, now is a great idea to build out a financial plan to help avoid the stressors down the line. With a plan in place, you can relax and enjoy the extraordinary gift of welcoming a new life into the world.

How to Build a Basic Budget

February 5, 2018
By Council for Disability Awareness Plan, Protect Your Income

Many people are struggling to gain control of their finances. According to a LendingTree report in 2017, four in five Americans are in the red—and a quarter of those in debt do not have a plan to pay it off. By building a budget, you can gain clarity into your financial situation. This is a vital, first step that will help you chart a route to a far more sustainable place.

Here are the key steps in building a basic budget:

Set a Date

Building a budget requires time and patience; don’t set yourself up for failure by starting the process at a point in the day when you don’t have time to see it through. Peering into the cold reality of your finances can be an overwhelming and disheartening task, so take away any time stressors. Make a date for your budget by choosing a slot in the week where you’ll have a few hours to invest in the process. Invite anyone else who may need to be included—and even think about making a few snacks to power you through the process. Rather than approaching it as a chore, see this as a project that’s leading to your stability and peace of mind.

Choose Your Format

Are you going to use a spreadsheet? There are several great free templates online that you can download and work from. There is also a whole ecosystem of software tools that automate the process and increase accuracy. Or perhaps you’re far more comfortable with pen and paper. Choose a format that makes sense to you. As you build that budget, identify your goals. Are you trying to pay off a large medical bill? Do you have credit card debt to reduce or are you saving for an addition to the house? Identify what your realistic goals are, both short-term and long-term.

Gather Your Data

U.S. News recommends that you physically bring together all your bills, credit card reports, bank information, and paychecks. Spread this paperwork out on the table and gather the digital versions in your devices. Separate them into two parts: incomings and outgoings. Then start inputting all of these items into your monthly budget.

As you build out your budget, insert your income at the top—such as work, investments, and freelance projects. Then you’ll insert the various costs below. The first will be fixed costs such as utilities, mortgage or rent, and insurance costs. Then you can list discretionary costs—like gas, food, and entertainment. Don’t forget items that often go under the radar, such as car registration, memberships, and subscriptions.

Analyze the Data

Now comes the moment of truth: add everything up. If you earn more than you spend, congratulations, you have a surplus. If you spend more than you earn, the important thing is to spot the trend now and start correcting it. It’s vital to your long-term financial health that you see things realistically.

Now you can dig into the numbers and identify areas you can cut down on costs. Your fixed costs may be fixed—as the name implies—but perhaps you could find a better deal for some of your bills, such as your internet provider. If you have credit card debt, figure out how much you can pay off each month—you’ll want to do more than the minimum if you can. You can also review the dates for each payment. If they’re huddled close together in the month, see if you can spread them out.

Continue to work with the numbers until you get to a place where you can balance things out. Your discretionary costs are usually where the most cost cutting can occur. How much is that daily latte coming to on a monthly basis? You may also need to identify new sources of income to bring in.

Set Targets

Set a target for your costs for next month. If you’re giving yourself a limit for your spending on items such as groceries, one tried and true method is to put cash into envelopes for certain purchases, such as your weekly grocery shop or your money for lunch at work.

Then, as you move ahead, make sure you revisit your budget on a regular basis. Keep coming back and tweaking, and checking your progress on this document. By sticking with it long-term, you’ll start to see the gains and that budget may start to feel like your closest ally.

Why Millennials Need to Think about Disability Insurance

September 1, 2017
By Council for Disability Awareness Disability Causes, Disability Insurance, Insurance, Millennials, Personal Finance, Protect Your Income

Millennials are shaping up to be one of the most influential and unique generations of all time. They’re already the biggest population in US history, consisting of 92 million people (compared to 77 million “baby-boomers”), and they currently make up close to half of the American workforce. One thing that sets millennials apart from past generations is the concept of living life in the moment versus preparing for the future, which may be a result of a shifting global economy and changing workforce. One thing is for sure, however — many millennials scoff at the idea of purchasing disability insurance.

As nice as it would be to have invincibility on our sides, no one does, and no one — not even millennials — can predict the future. Here are just a few reasons why millennials need to think about getting disability insurance sooner than later.

1. The Chances Just Aren’t That Slim

One of the main reasons why people ignore the importance of disability insurance is because they believe disability will not happen to them. In many cases, these same individuals believe that disability only results from injury or “slip and fall” accidents — not true. In fact, chronic diseases such as cancer and heart disease have been identified as a leading cause of disability, not to mention risks associated with obesity and arthritis. One-in-four of today’s 20-year-olds will experience disability prior to retirement, and when the numbers are that high, securing disability insurance begins to make all the sense in the world.

2. Your Income Depends Upon It

Millennials are poised to make up approximately 75 percent of the global workforce by 2025. It’s an impressive percentage by any measure, and one which lends credence to the importance of having income protection. Statistically, 50 percent of 35-year-olds can expect to be out of work for a period of 90 days or more before reaching the age of 65. This equates to three months or more of lost income for those who do not have disability insurance deployed as a safety blanket, which, for many, can lead to foreclosure or eviction.

3. You May Not Be Eligible for Social Security Disability Benefits

When most people think about Social Security, retirement is what comes to mind. But Social Security disability benefits may also apply to those who cannot work due to a medical condition. Unlike private disability insurance, however, relying on Social Security disability benefits in the event of an incident can be risky, as 65 percent of initial claim applications are denied. Even if you do get awarded benefits, you need to be out of work for 12 months or more to collect — not ideal by any means.

With income protection on your side, you can enjoy the peace of mind associated with knowing that you have a financial safety net, should something come out of left field.

Is Supplemental Disability Insurance Worth It?

February 8, 2017
By Colin Lalley Disability Insurance, Personal Finance, Workplace

There’s an old saying that there are three types of people in the world: those with disability insurance, those without it, and those with supplemental disability insurance. Okay, that’s not an actual saying, but it’s true. Disability insurance is a great way to protect your .. more »

There’s an old saying that there are three types of people in the world: those with disability insurance, those without it, and those with supplemental disability insurance.

Okay, that’s not an actual saying, but it’s true. Disability insurance is a great way to protect your income if you are unable to work due to injury or illness. Many people receive some sort of group disability coverage through their employer. But is that enough?

Employer-sponsored life insurance usually isn’t enough protection for most people. The same goes for disability insurance. That’s why we’re going to throw a third group of people into that age-old adage. That third group is people who need a private supplemental disability insurance policy.

Here are three questions you should ask yourself if you’re debating purchasing supplemental disability insurance.

Do I Need More Coverage?

As mentioned above, this is a common question for most people. Most simply don’t have enough coverage through their employer’s group plan.

Many group plans only cover 60 percent (or less) of your income. And since your employer is paying for it, it’s taxable. This means your actual take home pay could be closer to 40 than 60 percent of your income. Plans may also have maximum benefit amounts. This means the income received won’t be nearly what you used to receive.

Are you able to cut your expenses by half to make that workable?

Adding a supplemental disability insurance plan, may bring your coverage close to 80 percent. That’s much more manageable – and less of an impact on your lifestyle.

What’s the Strength of My Group Plan?

Most group plans aren’t as robust as a private disability insurance policy. Most employer-provided disability insurance plans are own occupation policies, for the first two years of disability before switching over to any occupation policies for the remainder of the benefit period; some may never be own occupation. If you have a residual disability and can’t perform your job to the same capacity as you could before – you’re still earning money, but less of it – your employer’s group policy might not cover that at all.

Compare this to a private disability insurance policy, where you can get own occupation covered for as long of a benefit period as you want – two, five, or 10 years, or even all the way to retirement age. Considering one in eight workers will be disabled for five or more years over the course of their career, having that flexibility in terms of length of coverage is crucial.

Your employer coverage might also be insufficient if you qualify for Social Security disability insurance (SSDI). Group coverage could be offset by your SSDI coverage. This means you won’t receive as much as you were expecting through your employer. The good news? There is no affect to your private policy.

Buying a supplemental disability insurance policy ensures you have the most comprehensive coverage possible. If you’re relying solely on group coverage you receive through your employer, you don’t have control of the policy type. This means you could leave yourself vulnerable to loopholes.

What’s My Plan for the Future?

If you have health insurance through your employer, you know that if you ever lose (or leave) your job, you’ll lose your health insurance, too. Group disability insurance works the same way. This goes back to the last point of not having control of your policy: if you leave, or if your employer decides to cancel coverage, there’s not much you can do about it. You’re at the whim of your employer.

If you don’t have supplemental disability insurance and you leave your current employer, whether to take a new job or start your own company, you’re back at square one in terms of coverage. And if you’re further on in your career, you may hit a roadblock if you decide that now’s the time to get your own coverage.

As with life insurance, disability insurance requires applicants to go through an underwriting process. If you’re in poor health or have pre-existing medical conditions, it could prove difficult to find affordable disability insurance coverage. That’s why – as with life insurance – the earlier you buy, the better your chances of getting the protection you need at a price you can afford.

How to Get Supplemental Disability Insurance

So you’re ready to get supplemental disability insurance coverage, right? Great! The best part is it’s not any more difficult than applying for a long-term disability insurance policy.

Buying a supplemental disability insurance policy is usually less expensive than buying a single standalone policy, because you’re usually buying a smaller amount to complement your group coverage. Including a future purchase rider will allow you to increase your coverage in the future, with no further underwriting, if you leave your company, lose your group disability coverage, and need more protection.

The only real difference in applying for supplemental disability insurance is disclosing that you already have group coverage in place. When disclosing your group policy, you’ll need to make known the coverage amount, the benefit period, and the elimination period (how long after your disability before you’re eligible for benefits). The amount you can apply for depends on how much coverage you have through your employer.

Having group disability insurance is a great perk from your employer. But it’s not enough to stop there. To ensure your family has protection, beef up your coverage with a private supplemental policy. After seeing all of the potential gaps in coverage – whether it’s the amount of income replacement you’ll get, the length of time you’ll be protected, or the flexibility you’ll have with your policy – you owe it to yourself to at least review your group policy and see how you can better fill your financial safety net.

This post originally appeared on Policygenius.