| When you have a disability of any type, your | | | | insurance will pay out, if and when you need |
| time, energy, and emotions are all heightened | | | | it. |
| as you begin the journey to learn all you can | | | | |
| so that you can regain the best quality of | | | | Now, you know how much your STD and LTD will |
| life that you can, given your particular | | | | pay out each month. The question is, how much |
| circumstances. And, if you are married, and | | | | SHOULD YOU HAVE? |
| or if you have children, trying to | | | | |
| communicate with them what is going on with | | | | There are some simple ways to determine just |
| you, as well as to your doctors, becomes a | | | | how much is "enough", and it varies for each |
| difficult chore also. | | | | family. |
| | | | |
| With all of this chaos in your life, the | | | | 1) Sick leave - maintain at minimum 5 days, |
| absolute last thing that you need to worry | | | | and, at best, 10 days. In this way, you will |
| about is money! What if I can't work any | | | | be able to meet a usual time gap before your |
| longer? How will the bills be paid? | | | | STD kicks in. |
| | | | |
| Perhaps you are saying that you do not need | | | | 2) STD - most STD policies cover up to 26 |
| any disability insurance. Consider the | | | | weeks. To make sure that you have "enough" |
| following. | | | | STD TIME coverage, the weeks should cover |
| | | | your LTD's elimination period. |
| Disability Statistics[1] The odds of a person | | | | |
| having at least one long term disability | | | | 3) LTD - timewise, you will want your LTD |
| (LTD) that lasts three months or longer | | | | plan to cover you until your retirement age. |
| before that person reaches age 65. | | | | (Note, not all retirement ages are at 65. The |
| | | | retirement ages are increasing; make sure |
| DISABLED: (1999) According to the Disability | | | | that you know your specific retirement age.) |
| Management Sourcebook, the number of folks | | | | |
| between 17 and 44 with severe disabilities | | | | Now, let's talk about money. To calculate how |
| has increased 400 percent over the past 25 | | | | much money is needed by you and your family, |
| years. One in seven people will become | | | | consider the following. |
| disabled for five years or more before they | | | | |
| reach 65. ODDS, STATISTICS AND DISABILITIES: | | | | For each month, note the following. |
| (1999) The chances of using your homeowners | | | | |
| insurance are about 1 in 88. The odds of | | | | 1) OUTGO Your "must pay" expenses (including, |
| using your auto insurance at about 1 in 47. | | | | but not limited to the following: house |
| The chances of using your LTC insurance is | | | | payment; utilities; car and gasoline; medical |
| about 2 in 5. One out of two women and one | | | | expenses; any child care; any loans, credit |
| out of three men will spend some time in a | | | | cards, etc.) |
| nursing home. (Journal of the American | | | | |
| Society of CLU, 1996) More than 12 million | | | | 2) INCOME ON DISABILITY Add together any |
| older Americans will require some form of | | | | income other than yours (i.e., spouse's |
| long term care by 2020. (Health Insurance | | | | income) plus whatever you will receive on a |
| Association of America). 72% of residents in | | | | monthly basis from your company-paid STD and |
| a nursing home are women 90% of nursing home | | | | or LTD. Add to this amount whatever savings |
| residents are over the age of 65. 22% of the | | | | you have, and how long this would last. |
| disabled population is under age 65. (Puget | | | | |
| Sound Life Underwriters Journal 1996). | | | | The gap between income on disability and |
| Functionally disabled people between the ages | | | | outgo would be the amount of income that you |
| of 18 and 64 represent 40% of Americans | | | | might want to offset with a private LTD |
| needing long term care services. (Life | | | | policy. |
| Insurance Selling 1995) | | | | |
| | | | WHY THE NEED FOR DISABILITY INSURANCE |
| The likelihood of needing LTC (obviously) | | | | BENEFITS? What are the odds?: (2005) in the |
| increases with age. In 1991, 29.2% if those | | | | next hour 194 people will be injured in car |
| age 45- 64 had a disability; 44.6% between 65 | | | | accidents, 57 homes will catch fire, 230 |
| and 74 had a disability; 63.7% between the | | | | people will die, and 1,027 will become |
| ages of 75 to 84. 15.3% and 41.5% | | | | disabled. |
| respectively had a severe disability. | | | | |
| (Employee Benefit Research Institute, 1995) | | | | Here are the latest disability trends that |
| 80% of disabled persons are cared for at home | | | | concern you. Ø Today, we live harder, work |
| or in adult day care centers. 72% of | | | | harder and play harder than ever before. As a |
| caregivers are family or friends. (Puget | | | | consequence, there has been a dramatic |
| Sound Underwriters Journal). The cost of home | | | | increase in disabling injuries and illnesses. |
| care can run from $4.25 to over $200 daily | | | | Ø In the past 25 years, the number of |
| depending on the level of skill needed (SF | | | | severely disabled people ages 17 to 44 has |
| Chronicle, 1995). Caring for each Alzheimers | | | | increased 400 percent. While the number of |
| patient will cost more than $213,000- on top | | | | people with protection has also increased, |
| of other medical expenses- over the remaining | | | | most Americans still have a disability income |
| five years of their lives. (American Journal | | | | protection gap. Ø This is alarming when |
| of Public Health, 1994). Over 99% of nursing | | | | you consider in a year's time, chances are |
| home care is either custodial or intermediate | | | | only one in 1,200 of you will need your fire |
| care, not skilled care, and is not covered by | | | | insurance-generally considered a necessity |
| Medicare or Medicare supplements (Journal of | | | | for homeowners-but one in eight (8) of you |
| the American Society of CLU's, 1996). | | | | will be sick, injured or killed. Ø The |
| | | | risk of becoming disabled will continue to |
| Reasons People Take STD and LTD Leading the | | | | increase. |
| list of Top 5 causes of short-term disability | | | | |
| (STD) workplace absence for 2001 was | | | | Aging is a main factor. Ø Because of |
| pregnancy (normal), followed by complications | | | | advanced trauma and cancer care, more people |
| from pregnancy, injuries (excluding back), | | | | today survive illnesses and injuries that |
| back conditions and digestive/intestinal | | | | were deadly 20 years ago. In 1930, the |
| conditions. The causes of claims and the | | | | average U.S. life expectancy was 61; today, |
| percentage received for each cause were as | | | | it is 76; and by the year 2050, it will be |
| follows: LTD - 13 percent - Cancer, 12 | | | | 82. Today, there are 3.6 million Americans |
| percent - Complications from Pregnancy, 11 | | | | over age 65; by 2040, there will be 13.8 |
| percent - Back, 9 percent - Cardiovascular, 5 | | | | million. Ø With Americans now living |
| percent - Depression (2003) every year 12% of | | | | longer, age has and will continue to have a |
| the adult U.S. population suffers a long-term | | | | profound impact on disabilities. According to |
| disability. One out of every seven workers | | | | the National Association of Health |
| will suffer a five-year or longer period of | | | | Underwriters, there are 3.74 disabilities per |
| disability before age 65, and if you're 35 | | | | 1,000 people ages 45 to 49. This increases |
| now, your chances of experiencing a | | | | nearly five times more with age, to 15.18 |
| three-month or longer disability before you | | | | disabilities per 1,000 people ages 60 to 64. |
| reach age 65 are 50%. If you're 45, the | | | | Ø In addition, the traditional retirement |
| figure is 44% STD - 20 percent - Pregnancy | | | | age is moving up, and more people are likely |
| (Normal), 9 percent - Pregnancy | | | | to work part-time after retirement, thus |
| (Complications), 9 percent - Injuries | | | | increasing the risk of a disability later in |
| (Excluding Back), 8 percent - Back, 8 percent | | | | their life. |
| - Digestive/Intestinal | | | | |
| | | | Changing workforce Ø More than 10.5 |
| The primary sources of disability insurance | | | | million people are starting their own |
| are STD and LTD. It is important to see if | | | | businesses, consulting or working at home, |
| your company offers these insurances. If they | | | | according to the Bureau of Labor Statistics. |
| do, make sure that you are covered. If they | | | | And more women than ever are now working; |
| don't, you can get personal STD and LTD. By | | | | many families today rely on two incomes. In |
| visiting the following website, you can get | | | | the early 1900s, there were only 500,000 |
| more information about disability insurances. | | | | married women in the labor force. They |
| | | | represented just 4.5 percent of all married |
| How Much Disability Insurance is "Enough"? | | | | women. Today, there are about 39 million |
| Research shows the following about | | | | married women working outside the home |
| employer-offered STD (short term disability) | | | | (representing 60 percent of all married |
| and LTD (long term disability). | | | | women), and 17 million of them have children |
| | | | under age six. Ø With more women working |
| Disability Insurance: ( 2003) In small | | | | and families relying on two incomes, the need |
| private firms, fewer than one-quarter of | | | | for disability protection has become greater, |
| workers have short-term disability coverage | | | | especially since women are twice as likely to |
| (22%), and just 13 percent have long-term | | | | suffer a disabling illness than men. And with |
| disability income insurance, according to the | | | | more people working out of their homes and |
| Bureau of Labor Statistics. | | | | earning substantial incomes, the need for |
| | | | more flexible, individualized protection is |
| Half of workers at large employers (100 or | | | | on the rise. |
| more employees) have short-term disability | | | | |
| income insurance (47%), and more than | | | | Increase in workplace disabilities Ø Over |
| one-third have long-term disability coverage | | | | the years, the causes of disabilities have |
| (40%). | | | | changed in the workplace. Ø Today, |
| | | | disabilities due to psychiatric conditions, |
| Disability coverage (American Council of | | | | severe back pains, Carpal Tunnel Syndrome, |
| Insurers 2004) 82% of employees are lacking | | | | muscle/tissue disorders and Chronic Fatigue |
| in adequate coverage. | | | | Syndrome are increasing dramatically. Among |
| | | | the most common long-term disabilities (those |
| The Society of Actuaries says that only 2.5% | | | | lasting longer than three years) are |
| of employees have individual disability | | | | circulatory and heart conditions, back |
| coverage (i.e., paid for by the employee and | | | | disorders, psychiatric conditions, general |
| not the company). | | | | sickness and subjective pain. Ø Common |
| | | | short-term disabilities (those lasting less |
| If you have already read the other blogs | | | | than three years) include normal pregnancies |
| about Disability insurance, you know how | | | | as well as pregnancies with complications, |
| important it is to know about what types of | | | | injuries, muscular or skeletal problems, and |
| insurance you have, and how much each | | | | psychiatric or substance abuse problems. |