But how about this fact: Between the ages of 25 and 65, you’re four [...]]]> Disability insurance is one of the most overlooked products in the insurance industry. No one wants to think about how different life would be if you were suddenly disabled and couldn’t work, as a result of an accident or illness.

But how about this fact: Between the ages of 25 and 65, you’re four times more likely to be disabled than to die.

Unlike life insurance, disability insurance is not there just to protect your loved ones when you are gone. Disability insurance is designed to give you monthly income to continue to pay your mortgage, rent, or car payment — even though you can’t work.

Yes, Social Security does have a disability program (SSDI). But it is notoriously difficult to access that coverage, and you might even need a lawyer to help you press your claim. The process could take years.

That’s why you need to consider buying your own coverage — even if you have some coverage at work. That employer-paid policy may not be transferrable if you leave your job, and the benefits are likely to be taxed if you need to use the policy. But if you purchase a disability insurance policy on your own, with after-tax dollars, any benefits will come to you tax-free.

Generally speaking, disability insurance is a good idea even in your twenties, and especially if you have no one else to provide for the basic costs of daily living in case you become disabled. Single parents might also have a special need for this insurance.

As you reach your late fifties, and are closer to receiving Social Security retirement income benefits, you might want to switch your premium dollars to long-term care insurance, which becomes the greater and more costly risk.

Disability coverage and costs

How much coverage do you need? Of course, you’d like to replace all your income if you are unable to work. But no insurance company is going to write a policy that gives you that incentive! Instead you will probably qualify to replace only about 60 percent of your current income, which must be documented at the time of purchase.

The higher your income, the smaller the percentage the insurance company will replace. That is, if you earn $50,000 a year, you could replace 60 percent of your earnings, but if you are a highly paid professional earning $300,000 a year, you will probably max out with benefits of $10,000 per month.

The amount of coverage and cost will also depend on your occupation. Almost paradoxically, the higher income professions such as lawyer and doctor, pay less per dollar of coverage — and get more lengthy coverage — than a carpenter or electrician, who may qualify for only five years of disability payouts. Insurance companies divide professions into classes — and the coverage and price will depend on your type of work.

One important issue with disability insurance is the definition of disability. It is more expensive to purchase a policy that pays out if you are unable to do your “own occupation.” For example, a surgeon who loses the use of one hand could still do other work as a medical professional — but it surely means she can’t perform as a surgeon. The policy will pay because she is unable to do her own profession. Make sure your coverage guarantees payment even if you are not totally and permanently disabled from any kind of gainful employment.

The annual cost should be about 2 to 3 percent of your current income to protect your future income. According to AccuQuote, a 30-year-old male who makes $40,000 a year would pay about $733 per year for coverage that replaces 69 percent of his salary.

A 40-year-old woman who earns $50,000 could replace 68 percent of her salary for an annual premium of approximately $2,000 a year. In each case the benefits would continue to age 67, at which time you could access Social Security retirement benefits. And, if you’re willing to pay slightly more, you can get additional inflation protection.

Be careful to deal with a top-rated insurance company (Guardian, Unum, for example) to make sure that you will be getting the payout without a hassle if and when the time comes to trigger your policy. Since there are so many variables in this kind of insurance, you’ll have to deal with a specialist. For quotes on disability insurance go to www.AccuQuote.com or call (800) 442-9899.

It’s worth checking out this “paycheck insurance.” You’ll never know how valuable that income is — unless you lose it for health reasons. That’s the Savage Truth.

By Terry Savage, published on www.suntimes.com

However, whether or not small businesses recognize these and other official declarations, there are two critical observations decision-makers need to make about their employees today, and consider year-round, because [...]]]> May is full of important health and wellness awareness dates, including Employee Health & Fitness Month, Disability Awareness Month and Women’s Health Week (May 13-19).

However, whether or not small businesses recognize these and other official declarations, there are two critical observations decision-makers need to make about their employees today, and consider year-round, because of their potential to directly impact business productivity and turnover costs.

First, U.S. workers are in denial about the likelihood of accidents and serious illnesses. In addition, they are not prepared to handle the financial consequences of unexpected health issues.

Workers’ Unrealistic Health Optimism

When it comes to anticipating a serious illness or accident, Americans may be overly optimistic. According to the American Cancer Society’s Cancer Facts & Figures 2012, one in three women and one in two men will be diagnosed with cancer at some point in their lives. The American Heart Association’s Heart Disease & Stroke Statistics 2012 shows that one in six U.S. deaths in 2008, was caused by coronary heart disease.

Despite these findings, the 2012 Aflac WorkForces Report revealed six out of 10 workers (62 percent) think it’s not very or not at all likely they or a family member will be diagnosed with a serious illness like cancer, and more than half (55 percent) said they were not very or not at all likely to be diagnosed with a chronic illness, such as heart disease or diabetes.

In addition, despite optimism about their physical health, the study reveals that American workers also are concerned about their financial health, and many admit they are unprepared to handle the financial consequences of a serious illness or accident in their family.

Financial Strain & Productivity Drain

Half of American workers (51 percent) are trying to reduce debt, according to the Aflac study, and nearly six in 10 (58 percent) don’t have a financial plan to handle the unexpected. In addition, only eight percent of U.S. workers strongly agree their family will be financially prepared in the event of an unexpected emergency, and 28 percent have less than $500 (51 percent have less than $1,000) in savings for emergency expenses.

These are among the personal challenges weighing on workers’ minds daily and impacting individual productivity through absenteeism and distracted work. Decision-makers are keenly aware. In fact, 63 percent of leaders at small businesses believe that productivity is lost because employees are concerned about personal issues, according to the study.

The fact that American workers aren’t aware of their medical risks and the potential financial impact of those risks is a very real concern that is only compounded when workers don’t take full advantage of available benefits options or adjust their savings strategies to be more prepared.

For example, when asked how they would pay for out-of-pocket expenses due to an unexpected illness, the study found that more than half (57 percent) of respondents said they would have to tap into savings, 30 percent would use a credit card and 19 percent—nearly one out of five people—would have to withdraw funds from their 401(k) plans to cover the costs.

Now, more than ever, American workers need to understand that well-being means more than just good health—it’s being prepared for the reality of whatever life may bring and taking the necessary measures to protect themselves and their families. A very real connection exists between health and finances—a worker’s financial stability and employment security can be threatened by an unexpected illness or accident, and conversely, the ability to obtain adequate medical care can be influenced by finances.

Many Benefits of Employer Action

Most individuals are looking to their employers to educate them about all available benefits options, not just traditional benefits changes or choices, to better understand how they can have a more secure safety net.

The Aflac study revealed that 58 percent of employees at small businesses would be likely to purchase voluntary health insurance plans if offered by their employer. Yet, small businesses are least likely to offer voluntary insurance policies (just 19 percent, compared to 41 percent of medium-sized and large companies) for various reasons, including the common misconception that these policies will increase their health care costs. Workers’ perceived lack of benefits understanding also is a limiting factor.

For example, only 19 percent of HR decision-makers at small businesses believe their employees are extremely/very knowledgeable about voluntary benefits.

However, despite these low figures, small businesses excel at putting employees’ benefits interests first. The study found that small businesses are more likely than medium-sized and large businesses to rank taking care of employees as their top objective, with 23 percent ranking it first. More small businesses are realizing that making group voluntary insurance policies available to employees has no direct cost and may reduce corporate taxes by cutting FICA tax contributions.

Additionally, savvy decision-makers are seeing the value of voluntary plans to not only enhance a company’s benefits package and competitive status versus larger organizations’ benefits programs, but they can demonstrate to employees that they matter and ultimately help avoid the high cost of turnover.

Conclusion

Once benefit options are added or expanded, it’s critical for employers to effectively communicate year-round about how new benefit options like voluntary insurance can help with high out-of-pocket expenses associated with a serious illness or accident. By doing so, businesses can not only help their workers have a better understanding of the options that are right for them, but also help reduce common mistakes made during the enrollment process, generate stronger retention, and build greater appreciation for their total compensation packages.

Published on www.businessinsider.com

The news comes out of the 2012 National Study of Employers by the workforce think tank Families and Work Institute, released jointly April 30 [...]]]> Employers are showing more flexibility with their workers, a new report reveals, with more firms offering time during the day to attend to family and personal matters and flex time.

The news comes out of the 2012 National Study of Employers by the workforce think tank Families and Work Institute, released jointly April 30 with the Society for Human Resource Management.

The study’s researchers found what they called surprising increases in the numbers of employers who allowed workers to alter when they started and ended their work days, to work from home and to determine their paid and unpaid overtime hours.

Consider the findings:

• 77 percent of employers allow at least some employees to use flex time and periodically change their start and quit times – up from 66 percent in 2005.

• 87 percent allow employees to take time during the work day to tend to family or personal affairs without a dock in pay. In 2005, 77 percent of employers allowed it.

• 63 percent of employers allow employees to occasionally work from home – nearly double that of 2005, when 34 percent of employers allowed staffers to work from home.

Perhaps it’s not much of a surprise. Employers working with ever-smaller staffs are beginning to take the long view, finding more ways to accommodate and retain employees.

“It’s clear that, in order to remain competitive, employers must find ways to offer flexible work options if they want to attract and retain top talent,” said Henry Jackson, president and chief executive officer of the Society for Human Resource Management.

As a result, employees’ schedules are more malleable, researchers said, allowing employees to work longer days or shape their work hours to take care of personal responsibilities and still produce at the office, said Ellen Galinsky, Families and Work Institute president and one of the study’s authors.

“Although some may have expected employers to cut back on flexibility entirely during this economic downturn, we are seeing employers leverage flexibility as they look toward the future,” Galinsky said.

Read the complete report at www.whenworkworks.org orwww.familiesandwork.org

By Darrell Smith, published by www.sacbee.com

Here’s how the law works:

— Insurers covering individual consumers and small employers must spend [...]]]> Rebates totaling $1.3 billion from health insurance companies should go to more than 3 million individual policyholders and thousands of employers this year because of President Barack Obama’s health care law, a report from the Kaiser Family Foundation says.

Here’s how the law works:

— Insurers covering individual consumers and small employers must spend at least 80 percent of the premiums they collect on medical care and quality improvements. The benchmark is 85 percent of premiums for insurers covering large employers.

— Insurance companies must provide rebates if they do not meet those standards.

Who gets refunds:

— Almost one-third of consumers in the individual market will get rebates averaging $127. These are consumers who are not covered by an employer and purchase their policies directly from an insurance company.

— Average amounts will vary significantly by state. The highest will be paid to consumers in Alaska (average of $305), Maryland ($294) and Pennsylvania ($243). On the opposite side of the scale, no individual market insurers in Hawaii, Maine and Washington, D.C., expect to issue rebates.

— Nationwide, rebates to individual consumers will total $426 million.

— In the small employer market, 146 insurance plans covering nearly 5 million workers and dependents will issue $377 million in refunds. Employers do not have to pass those on to workers. They can also opt for a discount on next year’s premiums.

—In the large employer market, 125 plans covering 7.5 million workers and dependents will issue $541 million in rebates.

By The Associated Press, published on http://abcnews.go.com

Q: I’m 65 and interested in getting long-term-care coverage. My financial adviser recommends a life-insurance policy, which has a long-term-care benefit, that costs [...]]]> Paying for long-term care is a worry for many, particularly aging baby boomers. Certified financial planner Kevin Young of Young Wealth Management in Davis, Calif., offers some advice on the topic:

Q: I’m 65 and interested in getting long-term-care coverage. My financial adviser recommends a life-insurance policy, which has a long-term-care benefit, that costs upfront about $70,000. The selling feature is that they refund your premium if you don’t use the long-term care after 20 years. A regular long-term care policy will cost $3,500 annually because of my age. My husband and I have about $400,000 in IRAs. Would it be a good move to protect these investments by buying either the regular long-term-care policy for me or the life-insurance policy that includes long-term-care benefits?

A: Health insurance and Medicare do not cover the expense of long-term care. If your net worth is mainly your IRA balance and your primary residence, buying LTCI/life insurance might not be the best use of your limited resources.

The policy being sold to you is known as a combination policy or bundled policy. It’s a life-insurance policy with a long-term-care insurance rider, which can be used to pay for long-term-care expenses. The pitch from insurance agents who sell this type of policy is that, if you don’t use the long-term-care benefit, you will have a death benefit.

The death benefit is reduced dollar for dollar when you use the long-term-care portion of the life-insurance policy. Combination policies such as this are expensive and do not offer a good value.

The drawbacks to these types of policies include high costs; couples cannot share the pool of long-term-care benefits; long-term-care benefits might be limited; and benefits might not keep up with future long-term-care costs.

By  Claudia Buck

M cCLATCHY NEWSPAPERS