One of the most destructive reactions to those with private disability is “fear.” Although I write about it quite often, I’m not sure my message is understood as something that can be planned for and controlled, or just part of a complex system gone bad that has to be dealt with.
“Fear of not having any money” is really quite scary, and takes its toll emotionally further affecting insureds’ health and well-being. No one wants to live out of their car, or have no where to go, and yet insurers deny thousands of disability claims every day with no thought of consequences or sympathy to those who placed their trust in disability insurance.
For the last 50 years or so, Americans have lived in a paternalistic society where employers provided “defined contribution” and contributory matching 401(k)s to employees. It seemed easier to contribute to your own retirement plan when you never saw the money on a pre-tax basis. But, over time with recession on the horizon for the last 20 years, complete with 1% or less interest rates, individuals learned very quickly that the value of a dollar was greatest when the money was spent rather than saved.
And, we all became a society of spenders, not savers, even when spending money required the excessive use of credit cards and other miscellaneous debt. In other words, “living from pay check to paycheck” became as American as apple pie, and a habit most Americans still embrace.
The only way to avoid the fear of “not having any money” is to make sure you have some – and that requires planning. Depending on our federal and state resources to supply all of your needs will eventually be your downfall. When your employer offers you disability insurance, that fact alone should put the probability of sickness or injury on your planning plate. I am constantly amazed when people tell me, “I didn’t know I had disability insurance.”
Americans love to live the middle class stereotype – karate and ballet lessons, the vacation to Disneyland every year, the large ticky-tacky houses with the lavish mortgages that goes along with it, and family Pizza night thanks to Dad’s credit card. Kids go to school in the morning, Mom and Dad go to work, and eventually kids go off to college. I’d call this the American dream except for the fact that behind the dream lurks thousands of dollars of debt Mom and Dad are never going to get out of.
Enter in an unforeseen medical impairment that prevents one parent, or the only parent, from working. Household income is cut by half, or disappears; bills won’t get paid; and suddenly everyone is aware they have a disability Plan or policy, but have no idea it, too, can be taken away. What now? And the fear begins……you never know from one month to the next whether a benefit check will arrive.
It is important for all working adults to plan for an evitable unpredictable future. (I’m not talking about survival prepping or bug out bags, but that’s not such a bad idea either!) How will you support the family if you can’t work? Where is the money going to come from for prescriptions, health insurance, utilities and gas? And, the question most people forget — “How will I support myself after the age of 65 when my policy ends? I’ll have 2 years to normal retirement age, and no one can live off of SSR alone?”
These are all good questions, but they need to be asked and considered BEFORE a disability begins, not afterward. What will happen to you and your family if the disability company denies your claim? Do you have money saved to survive financially? Also, do you know where your local resources are and what you might be entitled to?
In Part II of Money Management I will give specific ideas and options for future planning and teach you how to figure out your net worth. And OK, I get it, most people who read my blog are already disabled and receiving benefits, but I’m hoping my readers will spread the word to working friends and family members who need to read this article. Young people just starting out will also benefit from information on money management.
Remember, YOU are your own best asset.
Stay tuned for Part II of Financial Management for Future Disability And Beyond