So far this week I have been notified of 3 young adults, in their twenties, who have had serious back problems. One single young lady and a young man, with small children, have had to have back surgery. Ideally, they are only out of action for a few weeks.
However, one young man, with a wife and two children, has a degenerative spine disease. He has not been able to work, full-time, for over two years.
These reports reminded me of a few very important insurance points that are easy to forget. In this post I want to remind you what they reminded me.
OBAMACARE DOES NOT COVER EVERYTHING
While Obamacare may, or may not, be a legitimate help with medical bills, there is one thing that is definite. None of the approved health insurance plans in Obamacare will help pay for non-medical bills.
While someone is recovering from treatment for an accident or disease, bills do not stop. Mortgages, car payments, utilities must still get paid. Groceries must still be bought and kids are always asking for money for this and that at school.
If you do not have sufficient money in savings to continue to pay these bills, Disability Income insurance is your only option other lowering the standard of living for you and your family.
DISABILITIES ARE NOT JUST FOR THE AGED
While it is true that the older someone gets the higher their likelihood of disease. It is also true that even young people can get sick or injured.
The latest statistics I have seen indicate that a 25-year-old, who is starting his/her career, has almost a 6 time greater chance of being laid up and unable to work for 90 days or more than of dying prior to age 65.
Ideally, that would not happen until an individual has 6 months worth of income in saving.
Unfortunately, the demands of being a spouse and/or parent often prevents an individual from saving as much money as the ideal demands. I know it did for my wife and I when the kids were young.
That is why it is wise to have, at least, 6 months worth of Disability Income insurance. A policy like that will allow an individual to keep up with the bills, assuming that Social Security Disability Income payments start right away.
SHORT TERM DISABILITY
The young adults who have had successful back surgery to repair their problems are both uncomfortable, but will heal and be able to resume their careers in a matter of weeks.
If they have enough money in savings to help them until they can return to work, they do not have any use for Disability Income insurance.
However, if they do not have any money in savings, a small Disability Income insurance policy could mean the difference between an uncomfortable few weeks and a stack of past due bills that could haunt their credit reports for 7 years or longer.
LONG TERM DISABILITY
My biggest concern is for the young man with the degenerative spine disease. He has not been able to work full-time for over 2 years, and it does not look like he will be better very soon.
Although his health insurance helps pay his medical bills, the additional expenses have eaten his meager savings away.
I have advised him to apply for Social Security Disability Income payments. Unfortunately there are two problems with that idea.
- SSDI requires that an individual be unable to work for at least 6 months. (In this case, that is not a problem.)
- If his disease is not listed on Social Security’s list of Presumptive Disabilities that get automatic approval, he will need to go through the review and appeals process. That can add several months before he will get any help from Social Security.
Until his Social Security Disability checks start coming, he will need to rely on his personal savings or Disability Income insurance to help pay the bills.
In light of that, if your employer offers Disability insurance to you, and you have dependent children, take advantage of it, if at all possible.
If your employer does not offer Disability insurance, you can probably get an individual plan. If that is what you elect to do, expect to be asked the following questions just to get a potential rate quote.
- What type of Disability Income insurance you want? Accident Only, Short-term Accident/Sickness or Long-term Accident/Sickness
- How much income do you want to cover? The monthly benefit should be high enough to pay your bills but not so high as to make it unaffordable. Remember, there is no law that says you must take the maximum benefit available.
- How long do you want the benefit period? I recommend 24 months as the optimal benefit period but you can go longer if you wish. That way, if there are any delays, or problems with your Social Security Disability application, you have plenty of time to get them corrected.
- What Elimination Period do you want? The Elimination Period is the amount of time you must be sick or injured before the benefits start. The longer Elimination Period you elect, the less your premium will be. To calculate this, ask yourself, “How long can I maintain my current standard of living if I got sick or injured and had to rely on my savings?”
- What is your date of birth?
- What type of work do you do?
- Is your business incorporated or do you operate as a sole proprietor?