An unexpected disability can affect anyone, at any time. In this article we will debunk common myths, shed light on important facts, discuss qualifications for disability, explore disability insurance, and provide general tips for federal employees on how to protect your financial security in the face of a sudden disability.

 

What is Disability Insurance?

Short-term disability insurance can help federal employees enhance their existing FERS or CSRS benefit. Short-term disability plans are purchased through private insurance carriers and offer additional financial protection in case of disability and provide income replacement for a set period after a disabling injury or illness.

 

Common Types of Disability

While disabilities can vary widely, some of the most prevalent types among federal employees include:

Musculoskeletal Disorders: Back injuries or arthritis, which can result from repetitive tasks or accidents.

Chronic Illnesses: Cancer, diabetes, or heart disease all can impact an individual’s ability to work.

 

Benefits of Disability Insurance

Income Replacement: Disability insurance provides a portion of the individual’s income if they are unable to work due to a covered disability.

Financial Security: It helps cover living expenses, medical bills, and other financial obligations during periods of disability.

Peace of Mind: Knowing that there is a financial safety net in place can alleviate stress and uncertainty during challenging times.

 

Myths vs. Facts

 

Myth #1: You can easily qualify and get paid with Social Security disability benefits instead

Fact: Applying for Social Security disability benefits is a time-consuming process. While you might be approved quickly for certain disabilities, the process of obtaining disability benefits can be complex and requires thorough documentation of the medical condition and its impact on the ability to work. Also keep in mind that Social Security Disability Insurance (or SSDI) benefits have a 5-month waiting period, which means that you will not receive any payment for at least 6 months (note: you may get paid earlier if you qualify for Supplemental Security Income).

 

Myth #2: The Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS) offer comprehensive disability coverage

Fact: Eligibility for FERS and CSRS is only availability to federal employees in certain situations and does not provide benefits for short term disabilities (more information at https://www.opm.gov/). Disability insurance provides an additional layer of financial security and ensures continued income in the event of a disabling injury or illness.

 

Myth #3: Disability insurance is expensive

Fact: Some policies can be purchased for under $15 (biweekly). Disability insurance premiums can vary based on factors such as age, health, and coverage options. Many find that the financial protection these plans offer offers far outweighs the cost, especially considering the potential loss of income due to disability.

 

Myth #4: Disability insurance is only for permanent disabilities

Fact: There are two types of disability coverage on the open market: short term disability and long term disability. Short term disability coverage is designed for temporary disabilities and offers income replacement for a limited duration, while long-term disability insurance provides coverage for extended periods, potentially until retirement age, depending on the policy terms.

 

Myth #5: Disability insurance is only necessary for physically demanding jobs

Fact: While physically demanding jobs may pose a higher risk of injury, disabilities can occur in any occupation — including desk jobs. Physical conditions, chronic illnesses, and even accidents in seemingly low-risk environments can lead to disabilities that impact an individual’s ability to work. Remember: accidents and illnesses can happen to anyone, at any time. Disability insurance provides financial protection against the unexpected and can help ensure peace of mind regardless of age or health status.

 

Myth #6: My employer will take care of everything if I become disabled while working

Fact: Federal employees do not have short term disability benefits. While FERS and CSRS offer retirement disability benefits to federal employees, these benefits may not fully replace lost income. Additionally, the application process can be lengthy, and approval is not guaranteed. And although compensation for injuries incurred during working hours through the Federal Employees’ Compensation Program (or FECA), benefits may be limited. It’s essential for individuals to have their disability insurance coverage to ensure comprehensive protection.

 

Myth #7: Savings are always enough to get people through periods when they are unable to work

Fact: While savings are important in ensuring, they may not be sufficient to cover the long-term financial impact of a disability. Disability insurance provides ongoing income replacement, allowing individuals to maintain their standard of living without depleting their savings.

 

Myth #8: Disability insurance is only for accidents, not illnesses.

Fact: Disability insurance covers a wide range of disabilities, including both accidents and illnesses. Chronic conditions, such as autoimmune diseases or degenerative disorders, can result in disabilities that prevent individuals from working. Disability insurance provides financial support.

 

Myth #9: If I have pre-existing conditions, I won’t be able to get disability insurance.

Fact: While pre-existing conditions may affect eligibility for disability insurance or influence premium rates, having a pre-existing condition does not necessarily disqualify individuals from obtaining coverage. Many insurance companies offer policies that provide coverage for pre-existing conditions, although there may be waiting periods or limitations on coverage for those conditions.

 

 

Quick Tips and Advice if Purchasing Disability Insurance

Understand Coverage Options: Review different policies to determine which coverage options best suit your needs and budget.

Read the Fine Print: Pay attention to policy details, including waiting periods, benefit amounts, and exclusions, to ensure you have adequate coverage.

Update Coverage as Needed: Life circumstances change, so regularly review your disability insurance coverage to ensure it still meets your needs.

 

Summary

Disability insurance can become a vital component of financial planning for federal employees by adding additional coverage that is not part of your standard federal benefits package. By understanding the facts and exploring coverage options, federal employees can make informed decisions to protect your financial future in the event of a disability. Taking initiative to add disability insurance coverage before a disabling event happens can help give financial security and peace of mind to you and your family. If you have additional questions about options, reach out today to one of our benefits experts about guaranteed-issue plans available exclusively for federal employees.