By Michelle Andrews, Washington Post,
Published: September 19, 2012
Disability insurance is one of those under-the-radar benefits you may take for
granted, especially if your employer picks up the tab for the coverage, as many
firms do. Because of that, as annual benefit enrollment time approaches you
probably aren’t worried about examining your disability coverage details and
costs the way you will your health insurance plan options. But you should.
The same pattern that has emerged in health insurance — employers’ shifting
more costs onto workers’ shoulders and trimming or eliminating benefits — is
occurring in disability coverage. This fall, as employers spell out insurance options
for next year, evaluate what’s offered and what it will cost, and make sure you’re
adequately covered.
Of course, one of the main reasons people give disability insurance short shrift is
that they don’t think they’ll ever need it. Meanwhile, they routinely buy coverage
to protect their lives and their homes, even though “for most people, the risk of
long-term disability is far greater than of [early] death or their house burning
down,” says Rich Fuerstenberg, a partner with human resources consultant
Mercer.
According to the Social Security Administration, a 20-year-old has about a 30
percent chance of becoming disabled by the time he retires. Although many
people assume that accidents are the most common reason for a disability
insurance claim, illness accounts for 90 percent of all claims, says Barry
Lundquist, president of the Council for Disability Awareness, a nonprofit
education group funded by the disability insurance industry. The top reasons for
new claims last year, according to the organization’s annual claim study, were
musculoskeletal conditions such as arthritis or back problems, followed by cancer. A typical disability
insurance claim lasts about 2.5 years, according to research compiled by CDA.
When Monica Soltes took a buyout from Merrill Lynch and decided to start her own financial planning
business 10 years ago, she made sure she had health insurance but never considered buying disability
insurance. “You’re 38 years old and you think, ‘What’s going to happen to me?’ I didn’t even think about it,”
she recalls. Soltes moved from the Detroit area to sunny Del Mar, Calif., and rented an office with a view of
the ocean.
Not long after the move, she slipped when she stepped off the porch at her cousin’s Santa Monica home and
shattered her elbow. After multiple surgeries and an unsuccessful bone graft from her hip, she was no better
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