Every disabled worker we have ever represented tried to prepare for the worst-case scenario by purchasing disability insurance, or by signing up for coverage through an employer, union, or other group. Unfortunately, sometimes the insurer wrongfully denies or unreasonably delays payment of a valid disability claim. Despite taking personal responsibility by purchasing insurance, many disabled workers nevertheless find themselves in severe financial distress – unable to pay the mortgage or rent and other basic living expenses.
Discuss the existing financial safety net and whether it is adequate to address the needs of workers who become disabled. What steps can a young person joining the workforce take to avoid financial catastrophe if an injury or sickness renders them unable to earn a living at some point in their career?
Disabled Workers and the Financial Safety Net
It’s easy to take your health for granted when you’re young. However, any one of us can become disabled at any time unexpectedly. Many employers, unions, and other groups offer disability insurance that can be purchased for a low monthly fee. The first step a young person can take to avoid financial catastrophe if an injury or sickness renders them unable to earn a living wage at some point in their career is to purchase this insurance. Unfortunately, disability insurance is not enough. It’s common for disability insurance companies wrongfully deny claims or delay payments for as long as they can. Even when a person’s disability claim goes smoothly, the insurance often does not kick in until a certain waiting period or a specified duration of work loss. This creates financial distress for those experiencing an already difficult time. Even though these people often take personal responsibility and try to plan for the worst by purchasing disability insurance, they typically find themselves unable to pay the bills necessary to live such as their housing expenses and even struggle to buy food. In order to be prepared for such event, it’s important to have a financial safety net.
With millennials entering the workforce, financial safety nets often seem as if they are a thing of the past. The increasing levels in college tuition and cost of living have made our young professionals the most in debt generation to date. According to NCB News, 30% of those between the ages of 18 and 34 years old have less than $1,000 in their savings account, and 24% have no personal savings at all as of 2018. This typical financial scenario is not sufficient to maintain living expenses if the person becomes unable to work.
It’s incredibly important for young workers to be very mindful of their finances when entering their first role in their career. It’s important that these young professionals do not increase their expenses too rapidly or too high prior to building themselves a secure financial safety net. Similar, it’s important not to live outside of ones means. Having a financial safety net will protect the individual from derailing their financial security and goals when experiencing an unexpected emergency such as an illness, injury or permanent disability. Advise on how much money to save in this “safety net” fund varies. However, it is commonly recommended to save 6 months of living expenses for emergencies. This safety net will help bridge the gap between disability insurance and loss of wages.
Additionally, newly disabled workers must pay special attention to the causes of their disability. Is it something caused from their job? If so, they should seek workers compensation. Is it due to a car accident? If so, they should seek financial settlement from their car insurance. Is it due to medical negligence or malpractice? If so, they should see legal counsel. Overlooking details like these can mean missing out on financial assistance and opportunity that they may be entitled to. They should also research government assistance that they may qualify for. Additionally, they can even consider alternative career paths, such as looking for less physically demanding roles or work that they can do from the comfort of their own home if possible. If they run into issues with their disability insurance and are not paid what they are owed in a timely manner, they should seek legal counsel.
In conclusion, the current financial safety net among young workers in almost non-existent. If faced with a physical impairment preventing the earning of wages, this will create financial catastrophe. While disability insurance can help, it is not enough. Young workers must focus their finances on building a secure financial safety net of six months living expenses for emergencies. This should be a top priority to those entering the workforce, and for anyone who does not yet have a financial safety net.