Hit Hard by the Economy, Americans Risk Knockout Without Disability Insurance

The results of a new survey show the historic recession has left many Americans with less in savings and investments and as a consequence, more vulnerable to serious financial hardship in the event of illness or disability. According to the nonprofit LIFE Foundation, 27% of working Americans say they would have trouble supporting themselves financially immediately following a disability that keeps them out of work, while 49% would reach that point in a month or less.

The LIFE Foundation released the survey findings to support Disability Insurance Awareness Month, a national campaign targeting the estimated 90 million U.S. workers who lack disability income protection.

Money Saving Tips for Obtaining or Maintaining Disability Coverage

• Look into Group Disability Insurance - One of the most cost-effective ways to obtain disability insurance is through your employer. Employer-provided group disability insurance is typically easier to qualify for because the underwriting is often more lenient than for individual policies. With most group plans, employees are offered the same premium as others in their general age bracket, regardless of their health status or actual age. If you have the option to enroll in a group plan, look to sign up for a short-term disability (STD), which generally replaces a percentage of your income for three months, and long-term disability (LTD), which typically pays 40% to 60% of your pre-tax base salary for a longer period of time. To find out what your employer offers, talk to your benefits manager at work.

• Consider obtaining coverage through professional organizations or associations - If you don't have coverage options through work, look for alternate programs through organizations and associations which provide affordable disability assistance to qualifying individuals. Many professional associations offer members the opportunity to purchase insurance through a group plan. Other sources of coverage include the Veterans Administration pension (for veterans); civil service disability pay (for federal/state government workers); black lung program (for miners); state vocational rehabilitation programs or group union disability coverage.

• Check to see if you can qualify for lower premiums on your individual disability insurance policy - One of the primary ways of getting coverage is to purchase an individual disability insurance policy on your own. If you have your own policy, you may be able to qualify for lower premiums if, for instance, you have quit smoking, lost a substantial amount of weight or have made significant improvements to your health. In addition, in some cases changing careers may mean lower premiums. For example, if you go from being a construction supervisor to owning the company, your rates may decrease. If you're thinking of a new career, especially in today's economy, check into savings that may exist on the same amount of coverage.

• Modify your current coverage options on your individual policy - If you are wondering if your budget will allow you to hold onto your policy, talk to your insurance agent or company. One way to reduce your premiums is to lengthen the waiting period--the time you begin receiving the benefit after claiming disability--say, from 90 days to six months. If this is something you're considering, be sure that you would be able to provide for yourself and your family for that period of time until your benefits take effect.