A DISABILITY PLANNING KIT - PLAN NOW TO SURVIVE A DISABILITY

You have an accident that forces you to quit working for a long time (one year or longer).  You have a sudden health event, such as a heart attack or stroke, that takes you off work.  You lose all your income.  How do you survive financially?

Here is a checklist that you can use now to plan to survive a disability later:

1.  Find out what type of group disability insurance policy your employer has purchased, if any.  These are common, especially among larger and mid-sized companies.

• How long must you be off work before the policy begins to pay?  This is often called a waiting period or elimination period.
• How much is the maximum monthly benefit?  (60% of your salary is common, but plans can vary). 
• What other sick leave benefit is offered by your employer? 

2.  How much will your Social Security disability benefit be?  This is determined by how long you have worked, your total wages, and your age.  You can get an estimate by calling Social Security or going to www.socialsecurity.gov and setting up an individual account.  Caution:  Social Security has the following limitations for disability:

• It only covers a disability lasting 12 consecutive months or more (No short term benefit is available).
• It pays no benefit during the first 5 months of a disability (There is a 5-month waiting period).
• You must meet the strict definition of a medical disability.  Being off work is not enough, even with a doctor's excuse.  Social Security has their own guidelines.  For persons under age 50, disability usually means that you cannot perform ANY full-time job, not just the job you are used to doing).  The medical guidelines are very difficult to meet.
• Aside from all these limitations, it will take an average of 4 months to get a disability application processed (approved or denied).  An appeal will take up to 18 months longer.  Social Security is not quick.  So, plan for another means of financial survival while you wait.

3.  Start a savings plan or add to a plan you already have.  This is probably the weakest link for most individuals.  Little or no savings.  If you suddenly become disabled, and you depend on your income to pay the bills, savings will be absolutely essential.  There are usually no government benefits to help pay the rent, mortgage, utilities or other living expenses.  Savings to provide a few months of household expenses will be very valuable if you become disabled. It can mean the difference between keeping your home or losing it, being able to afford medical care or doing without it, and a dozen other important necessities.  Saving a few dollars a month over a long period of time can offer a safety net should a health catastrophe strike.