Workers should look closely at their disability coverage details and costs during the annual benefit enrollment period, because many employers are lowering the amount they will cover – or eliminating the benefit altogether.
According to the Social Security Administration, a young professional at the age of 20 has about a 30 percent chance of becoming disabled throughout his or her life before retirement. Both accidents and illnesses are responsible for the statistic, although illnesses account for 90 percent of all disability claims, according to the Council for Disability Awareness.
Another article published states that cancer, diabetes, and heart and respiratory diseases are responsible for 63 percent of deaths worldwide.
Social Security disability benefits are available for those who qualify, but being approved for them is a long and difficult process. Having a separate long-term disability insurance plan or other type of disability insurance through employers can help maintain much-needed income following an accident or during treatment for a disease. Doing so could keep people from being at the mercy of the Social Security Administration, which currently rejects about 85 percent of initial Social Security disability applications.
However, only about a third of working Americans have any type of disability insurance. Of the employers that do offer disability coverage, 37 percent paid the premium in its entirety in 2010 – meaning, many workers must pay a portion or all of the coverage.
In fact, disability insurance coverage is voluntary and must be paid in full by workers 50 percent of the time. And for those who must pay the entire premium, only about 40 percent choose to have it on their plan.
Employers that do pay a portion of the disability insurance are covering less – 50 percent of an employee's salary instead of 60 percent, for example. Purchasing an individual plan in addition to a disability plan provided through an employer can offer more financial security if a worker becomes disabled.