The Social Security Administration estimates that over 25 percent of all of today’s 20-year-olds will be disabled by the time they reach age 67. Experts predict that Americans are three times more likely to develop a disability before they turn 65 than they are to die before that age. These statistics indicate strongly that disability is something that people are better off planning for than hoping against.
Social Security disability insurance is available to people who develop a disorder or illness that will last at least a year or which will cause death and prevents them from working. However, applying for and obtaining SSDI benefits is complicated and difficult. It is essential to provide the SSA with the proper amount of medical documentation. The SSA denies many initial applications for SSDI, requiring appeals that can be lengthy.
Further, as readers will recall from a recent post in this blog, government auditors predict that the funding for Social Security, including disability insurance programs, is in serious danger of running out. If no adjustments are made, SSDI funds are projected to end in 2016.
Although people who meet the criteria for SSDI should be entitled to benefits, it may be helpful for many to plan ahead if possible to ensure that medical and other expenses can be covered in the event of disability.
Disability insurance is available for the purpose of paying expenses in the event of short or long-term illness. It typically covers about 60 percent of income. Disability insurance is often very affordable if obtained through an employer’s group plan. Professional associations may also be a source of coverage. If disability insurance is not available through an employer, it is possible to buy it from a broker, which generally costs more.
Experts say that only about 30 percent of all American workers choose to obtain coverage, leaving the rest vulnerable to financial disaster in the event of disability.
Source: The Star Tribune, “Disability insurance can save family finances,” Gregory Karp, Chicago Tribune, June 2, 2012