The Second Part to Health Insurance – Disability

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Disability Insurance

Some employers are discontinuing employee medical plans; people are being laid-off and lose their coverage; so people are buying their own health insurance plans. They call several companies to get a plan that covers doctors in their network at a premium they can handle, but they forget an important area of coverage. Many employer plans have coverage if you are sick or hurt and cannot work, but most individual plans do not.

It takes one moment for an accident or one bad lab test for a sickness. If that happens to you, how do you pay your house payment, groceries, utilities and even insurance premiums? One might think a disability is rare, but read on. The Society of Actuaries states the odds of a 35 year old having a disability that lasts three months or longer is 42%. The average duration of the disability that lasts over 90 days is 4.7 years. Since you cannot work, how can you pay your mortgage? How can you pay for groceries, insurance premiums? How can you replace your paycheck? Your spouse may also need to take more time off work. Can you afford to lose her/his income also? What are you going to do?

There may be some good answers to your questions. First, if you have an employer’s group plan, it may include disability coverage (DI). You will want to ask. Better yet, ask now before you need it.

People buying individual medical insurance should ask about disability coverage. Plans may be divided into two classifications: short term or long term DI. Short term plans may begin as soon as the 1st day for an accident, when you are not able to work. Sometimes these plans begin on the 8th or 15 day. DI plans usually pay about 66% of your wage, up to a set maximum amount for as long as six months. Long term DI may coordinate with Short term DI and start after 13 or 26 weeks and pay for several years or longer. Individual plan designs will vary from one company to another.

If the injury (or sickness) causes permanent disability, Social Security Disability (SSD) may be available. While SSD may start as early as 5 months following a disability, one of the requirements for SSD is that the disability will last at least one year; your first check, if you qualify, usually will not begin for a year.

As most everything, it is best to plan for situations that could affect you life. If your employer does not have DI, you can purchase “paycheck protection” from an insurance company. If you have an individual medical plan, ask about disability coverage. These plans vary company to company and it is advisable to secure the help from a qualified insurance agent. He/she can help you identify your needs, the plan and benefits best for you. What happens if this accident happens to your spouse? Do you need their income?

To gather information on disability coverages, who needs it and how it would work for you see the following resources:http://www.smartmoney.com/plan/insurance/do-you-need-disability-insurance-17318/, or www.MRMS-INC.com. Remember, DI is an area where you will, most likely, need the assistance of a professional insurance agent. Having your medical bills paid by insurance is good, but having money to live is critical.

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Steven A. Buttice is the president of Medical Reimbursement & Management Services, Inc., a firm specializing in issues affecting seniors, including seminars and consultation on Medicare Plans, Long Term Care and other types of insurance, claims issues, and sales/service of insurance products since 1984.

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