Disability Insurance Needs of Single People

Even if you are single, don't overlook disability insurance. While some types of insurance, like life insurance, are less important for a single person with no dependents, disability insurance is likely even more important if you are single. Why? You have no other income to fall back on, but your own. If you suffer a loss of income, how will you pay your bills?

Here's an interesting statistic: in any given year, 1 out of every 8 people will suffer a disability of some kind from auto accident injuries to common back problems. Any of these challenges could put you off your feet if not working for an extended period. If this happens to you, a source of income would do a lot to reduce your stress, wouldnt it?

If you are working, you may have some level of disability insurance through your job. A lot of employers offer some kind of short-term disability insurance to pay you from a few days or weeks, to as much as a year. If you arent sure about your coverage, check with your human resources department or employee benefit's manual. If you do have a disability plan, and you arent enrolled, find out when you can get enrolled and how long the waiting period is.

If you don't have disability insurance through work, you should be looking at purchasing some yourself. While relatively expensive, it can be an advantage to buy this insurance yourself, because if you ever have to collect benefit's, they should be tax-free. With some careful shopping, you should be able to get a policy that fit's your needs and your budget. Always remember to shop around! Prices can vary considerably from one insurer to another.

With that in mind, what coverage do you need? Well, you should be planning to replace 50% to 70% of your current income. There is a limit to the amount of coverage you can get; no plan will replace 100% of your income. Whatever level of coverage you pick, it should allow you to meet your normal financial obligations and should also take into account the resources you have. For instance, if you have savings equivalent to 6 months of your salary, you can likely afford to take a lower level of coverage. If you don't have any savings, you should be looking at a benefit equalling 70% of your salary. Regardless of what level of coverage you pick, an emergency fund is a good idea to handle any unusual expenses associated with your time off work.

• Claimant and physician coaching about return-to-work expectations
• Employer education on disability issues
• Identification of viable job alternatives, including light duty positions to allow employees to return to the workplace sooner
• Job site modifications to accommodate disabled workers to also allow early return
• Medical intervention to ensure the employee was receiving appropriate medical care, at all phases of treatment and recovery
• Three-way coordination and communication between the employer, employee and physician
• Vocational counselling

While there are definitely costs associated with providing these services, either directly through the employer or through other professionals, the study showed that there was a high rate of success in returning employees to work early. In fact, on average employees receiving the early intervention services were back at work almost 3 weeks earlier, which saved employers over $800 per claim. Among the most important results, 33 % fewer claims extended into long term disability.

It would appear that the right services make all the difference. According to some experts, disabled workers actually stay on disability longer due to employment problems and lack of support services, rather than medical issues.

Sun Life concluded that early intervention can overcome two main barriers to a good outcome and early return to work:

• Psychological
  
  You want your employee to return to work; you don't want them to adapt to not working. As soon as the employee is able to handle either a reduced workload or shortened day, it can help to get them back into the workplace.
• Social A close relationship still exists between the employer and employee, and that can be very positive. If everyone remains focused on recovery and return to work, the employee will respond to that. Otherwise, before long, an employee can quickly become "out of sight, out of mind."

Another benefit for employers? Real savings. One study by Watson-Wyatt Worldwide and the Washington Business Group on Health, examined 178 major companies with an average of 13,500 workers and found that those which implemented short term disability claim management activities such as independent medical exams, behavioural health interventions, case management, and transitional return-to-work programs reported savings between 18 percent and 19 percent.

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