The New York Times had a good article on how disability insurance can be a critical benefit of employment:
Tammy Brown of Bradford, Ark., signed up for short-term and long-term disability insurance after she started working for Wal-Mart Stores when she was 17. Fifteen years later, in December 2004, when she was 32, she learned that she had amyotrophic lateral sclerosis, or Lou Gehrig’s disease, and was told she had two to five years to live. She took the summer of 2005 off to spend time with her children, then 6 and 9, and received short-term disability. She went back to work in a wheelchair for about a year, then left on long-term disability in 2006. She receives about half of her salary now.
“Without disability, we would’ve lost our home, our vehicle,†Mrs. Brown, now 34, said. “We probably would’ve had to move in with my in-laws.â€
The family bought a handicapped-accessible van and installed a handicapped lavatory complete with roll-in shower and rails around the toilet as well as two ramps to the house and a lift to help move Mrs. Brown around the home. Now unable to use her hands or arms to any degree or walk, she needs 24-hour care, either from relatives or someone they pay.
“As I look back on it, I don’t know what we’d have done without it,†Mrs. Brown said. “I never thought I’d ever use it. I thought I’d be working at Wal-Mart until I was 60 or 70.â€
There are two major types of disability insurance. Short-term coverage, often offered by employers, covers the first part of a disability and may provide income for a week up to a year or two, depending on the policy.Long-term insurance starts after short-term coverage ends and helps replace income for a predetermined period, usually two or five years or when the disabled person retires. It can be offered through work — though usually not free —as well as through private policies.
Even those with a policy through work should consider buying private coverage, as an employer’s policy may be bare-bones, could take a while to begin and will not continue when the employee changes jobs. It may also exclude pre-existing health problems.
If you have a dispute with your disability insurer, please call Keating, O’Gara, Nedved & Peter at 888/234-0621 or fill out the contact form on this site. Your first consultation is free.