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Loss of Income Due to Illness or Injury

Like it or not, at some point in your life there is a possibility that you will be too ill or unable to work for an extended period of time. How will you pay your bills? What other income resources are available?

No one likes to talk about the grim possibility of prolonged illness or severe injuries, but you probably don't need to look very far to find someone you know who has endured one or the other. At such times of stress and worry, knowing that your income is secure would certainly help. What will you do if you are ever unable to work for a period of time due to an extended illness or severe injury? What income resources are available to help you make ends meet? Maybe you have short- or long-term disability insurance from your employer; do you know when those funds are no longer available to you? For many people, if they are unable to work, there is no paycheck. With some advance planning, there are a variety of financial resources that can take the place of lost income should you be unable to work.

Disability Insurance

Disability insurance is available to provide replacement income if you become unable to work. Not all employers offer long-term disability insurance, but even if your employer does, the benefit may only be approximately 60% of your salary and may only be available for a limited period of time. To assess how much disability insurance you might need, begin by:

  • Finding out exactly how much coverage your employer will provide and for how long they will provide benefits

  • Learn how the benefits will be applied and how long you will have to wait for benefits to begin

Your employer's Human Resources office will be able to provide information regarding your short- and long-term disability benefits in detail.

Social Security Benefits

There are some disability benefits available from the U.S. Social Security Administration (SSA), depending on your circumstances. Your benefit is dependent upon how much you presently earn and the number of years you have been contributing to the social security system. The benefit amount the SSA will provide is also dependent on other sources of compensation, such as workers' compensation or any government programs that may pay you disability entitlements or a government pension.

It takes time for your claim to be processed and, if you qualify for benefits, it takes even more time before you begin to receive those benefits. To explore your SSA options and eligibility, contact them at 800-772-1213 or visit them online at http://www.ssa.gov.

Other Resources for Disability Income

In addition to any disability benefits you may be able to receive from insurance, your employer, or the Social Security Administration, there are other potential sources of income:

  • Workers' compensation benefits may be available if you are injured at work or your illness is caused by your employment. Workers' compensation programs are administered by each state. For more information, see the U.S. Department of Labor Office of Workers' Compensation Programs website.

  • Veterans Administration pension disability benefits are available for eligible veterans. Contact the nearest U.S. Department of Veterans Affairs or call 800-827-1000 and ask for assistance.

  • Civil service disability pay if you are a federal or state employee. Search the U.S. Office of Personnel Management webpage for more information.

  • Black lung programs for miners. Visit the U.S. Department of Labor's Federal Black Lung Benefits Program webpage for more information.

  • State vocational rehabilitation programs for individuals who become disabled and wish to re-enter the workforce with new skills. For more information about vocational rehabilitation, see the U.S. Department of Education's Office of Special Education and Rehabilitative Services (OSERS) webpage.

  • Group union disability coverage for union members

  • Automobile insurance if the disability results from an automobile accident

  • Private insurance

  • Supplemental Security Income (SSI) for individuals with low income and limited assets. To learn more about SSI, visit the Social Security website.

  • Medicaid is also available for individuals having a low income and limited assets. Visit the U.S. Department of Health and Human Services (HHS) Medicaid website for information about the program and the available coverages.

When we fall on difficult times, many of us depend on family and close friends to help us until we are back on our feet. The good intentions of those close to us last a great deal longer if we are able to provide for ourselves as much as possible. Don't hesitate to search for the resources if you need them, and don't hesitate to plan for the rainy day either. Explore your options and start putting your money away for the "rainy day" that you hope never comes.

Take control of your finances with our debt help tools. Use our calculators and budget planner to help you manage your money.


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