The majority of the people in the U.S. do not have disability insurance, and the frightening statistics are, that 3 out of every 10 workers, who are 20 years old now, will become disabled before reaching retirement age.
While we have car, home, health, and life insurance, none of these may actually include provisions for disability. Becoming suddenly disabled can be devastating, not only physically, but financially. If you have no coverage, it may mean that no money will be coming in to pay bills or buy groceries for a very long time. If you are the primary bread winner in the family, it can become a financial nightmare.
Social Security does pay disability benefits, however, there are certain requirements that must be fulfilled before these benefits are available. You must have worked long enough and accumulated enough work credits. Today, one credit is earned for each $1,120 of wages received from a business that pays into Social Security. Once you have earned approximately 40 credits from the previous 10 years, you can apply for disability. However, the extent of the disability, and if it is permanent or temporary, must meet the definition of disability. According to S.S., a disability is generally a condition that keeps you from working for over a year.
In many cases, companies pick up the tab for disability insurance, or part of it, and it is included in your insurance package. It may be an option that you can choose, which will cost a little more in the way of deductions from the paycheck. For others, personal disability insurance can be purchased and is available through virtually hundreds of insurance providers. This insurance, for the most part, will kick in soon after you become disabled, covering both short and long term disability, and, in some cases, sick leave. Some insurances have certain capped amounts that they pay per month for disability claims. While this is generally determined by the type of coverage and the cost of the coverage, the cap may be around $20,000 per month. Other coverage is based on income, and may be around 65% of the total income per month.
Unfortunately, like many other insurances, we tend to put it off until it is too late. While disability insurance may seem like just another unnecessary expense, when it is suddenly needed, it can make a great deal of difference when it comes time to pay the bills, keep up with the mortgage and car payments, and buy necessities.
“Benefits for People with Disabilities.” The United States Social Security Administration. Web. 20 Dec. 2010. <http://www.ssa.gov/disability/>.