How secure will Social Security help you be if you are unable to work? It is emotionally difficult to prepare for the possibility that you may suffer a disability as a result of an accident or illness, but it is financially imperative to plan. Your quality of life tomorrow may depend on your efforts today.

The Latest Figures

The Social Security Administration (SSA, 2010) estimates that three in ten of today’s 20-year-olds will suffer a disability before reaching age 67.¹ In another sobering statistic, the SSA reports that 69% of the private sector workforce has no long-term disability insurance.² Essentially, seven out of ten workers would have to rely on their own personal savings, limited state-run insurance, and Social Security for replacement income in the event they could not work because of a disability. In 2009, the estimated average monthly Social Security benefit for all disabled workers was $1,006.³ Over the course of a year, that totals approximately $12,072, and for many workers and their families, that is significantly less than their annual expenses.

Men vs. Women

Throughout history, men have generally earned more than women. The SSA reports (2010) that as of the year 2007, the average salary for women was 78% of the average for men.⁴ This disparity affects women in two ways. Because disability benefits are based on earnings, the benefits for disabled male workers are typically higher than those of disabled female workers. However, the spousal benefit for widows is generally higher than that of widowers for the same reason—the median income of men is higher than that of women. These demographic trends are important to consider for families planning their financial security.

Supplemental Income Sources

In addition to Social Security and personal savings, there are additional options for workers and their families. Personal disability income insurance is a viable option for workers looking to manage the risk of losing their income. It offers coverage beyond workers compensation, which is state-run insurance that replaces a percentage of an employee’s income only for injuries that occur on the job or illnesses that are work-related.

Disability income insurance policies vary, but here are some key questions to ask:

• Are you covered for both accidents and illness?

• Does the policy define disability as the inability to perform your own job or any gainful employment?

• How long must you wait before benefits begin?

• How long will benefits last?

• Does the policy offer cost-of-living adjustments?

• Are benefits available for total and/or partial disability?

• What percentage of income will the policy replace?

Disability income insurance policies contain, exclusions, limitations, reductions of benefits and terms for keeping them in force.  Speak with your representative for costs and complete details.

If you lack insurance against disability, or are underinsured, you are possibly exposing yourself to serious financial risk. Avoid becoming another statistic—plan your future today.

¹The Social Security Administration, “Social Security Protection If You Become Disabled,”

www.ssa.gov/dibplan/index.htm.

²The Social Security Administration, “Social Security Basic Facts,” www.ssa.gov/pressoffice/basicfact.htm.

³The Social Security Administration, “2009 Social Security Changes,” www.ssa.gov/pressoffice/factsheets/colafacts2009.htm.

⁴The Social Security Administration, “Social Security Is Important to Women,” www.ssa.gov/pressoffice/factsheets/women.htm.

Copyright ã 2010 Liberty Publishing, Inc. All rights reserved.

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This article appears courtesy of Karl Susman. Karl Susman is a representative of the New Engl and Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people on the West Coast. You can reach Karl at the office at (424) 785-4337. New Engl and Life Insurance Company, 501 Boylston Street, Boston, MA 02116