Allsup Outlines Steps to Take When Facing Disability
No one plans to become disabled, either through injury or illness. Yet statistics show that these things do happen. What can you do if it happens to you or a family member?
Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center, has some advice:
- Make a plan and establish a budget. Gada says prioritizing expenses is important, as is figuring out how to use assets with causing long-term harm. For example, emptying retirement accounts could trigger penalties, and using credit cards adds unneeded interest to monthly expenses.
- Be honest about your circumstances and cut unnecessary expenses. Also take a hard look at necessary expenses, such as housing, groceries and health care, and figure out how you can reduce those costs.
- Apply for Social Security Disability Insurance (SSDI) and long-term disability. However, be aware that often long-term disability benefits won’t kick in until three to six months after the onset of a disability. As for SSDI, the wait is longer. Gada estimates it can take more than two years to be approved, and most people are initially denied. What can you do while you wait? Seek out additional assistance. The chart outlines the most common assistance used by people in similar circumstances.
- Whatever you do, don’t let your healthcare coverage lapse. Seek out COBRA coverage from your former employer or purchase private insurance. Medicare eligibility does not begin until 24 months after receiving SSDI benefits. "Unfortunately, people with disabilities don't have many good options for affordable healthcare coverage while waiting for Medicare eligibility," Gada said. "However, to the extent possible, keeping healthcare coverage should be a priority so they can continue to get the medical care they need."
The chart represents the most common assistance people used or considered while awaiting Social Security Disability Insurance, according to an Allsup Disability Finance online poll. A total of 178 people responded; the survey was completed in March 2012.