Why You Need Disability Insurance

Disability insurance is part of a solid financial plan for you and your family. Why? Disability can be financially devastating. Without disability insurance, your income is unprotected and your ability to meet your financial obligations could be at risk. The biggest issue with disability is that it comes out of the blue. No one plans to be disabled, either temporarily or permanently, but it does happen. Disability insurance ensures that if the unthinkable happens, you won't be devastated financially.

Your odds of dying in a given year are statistically 1 out of 106. Your odds of being temporarily or permanently disabled in a given year are 1 out of 8. Most of us would never think to drive without car insurance and yet your chance of being in a serious auto accident in a given year are 1 out of 70.

Based on statistics, if you plan for any disaster, it should be with disability insurance. The odds are higher that you'll need it.

In fact, statistics show that your chances of being disabled for 3 months or longer are much greater than your chances of dying prematurely! One reason for this is the success of the medical profession, which can now treat many conditions that would have been fatal in the past. In many cases, these new treatments will also mean a long convalescence period. Although it's good news that more people survive and even return to the working world after a serious illness or accident, it does mean that you have to plan for disability to be part of your working life.

So, what would happen if you did become disabled and couldnt work for days, months or even years? For anyone who is single, this would be a financial devastation. As a single person, you have no other means of support. If you are married, you may be able to get some support from your spouse, but would they be able to carry the full financial burden of the family alone? While you might think you work in a low risk job, you have to remember that illness can strike anyone and accidents can happen anywhere. For these reasons, if you or your family need your income in order to make ends meet, you should have disability insurance.

You may think that your financial needs could be adequately met through your disability coverage at work or through government programs like Social Security or Workers Compensation. However, you should really look at those assumptions and check what real coverage you have. In reality, only 50% of employers cover short-term disability, and only 40 % cover long-term. Further, it's getting harder and harder to qualify for government programs, as government money dries up and new rules make it tougher to get. Social security actually denies 50% of the claims that arrive in their offices. For that matter, keep in mind that workers compensation only applies to accidents or illness that occur because of the job and in the workplace. If you are hurt when you are not working, you won't qualify for this either.

With this in mind, it makes sense to review what coverage you have, if any, and buy the right level of protection for your unique situation.

• 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.