Breaks and Benefits: Tools for Disabled People Seeking Financial Stability

According to the Council for Disability Awareness, about one in four 20-year-olds will become disabled before they reach retirement. That’s a sobering fact, especially when you consider that millions of working Americans do not have disability insurance (other than basic Social Security coverage). It’s essential to have financial resources so you can afford effective and safe care later in life. Here are a few points to consider if you’re a disabled individual looking for financial stability for you and your loved ones.

A safety net

Life insurance provides an important financial safety net if you’re unable to continue working. It can prevent your family from losing their home and allow your children to get a college degree. It’s also an important resource if you require ongoing care and rehabilitation for your disability, an expense that can place a tremendous strain on anyone’s financial situation.

Disability insurance also provides your family with income if you’re unable to earn a salary. It replaces up to 60 percent of your earnings, which usually takes the form of a monthly payout. Check with your employer to see what benefits their disability coverage provides. If they don’t offer disability, talk with an insurance agent or financial advisor about purchasing coverage at an affordable rate.

Burial insurance

The average cost of a funeral today ranges somewhere between $7,000 and $9,000 ($6,000 to $7,000 with cremation), which includes expenses like viewing, burial, transportation, embalming and other services. That’s a significant amount of money for many people and can be financially devastating if your family is caught unprepared. Burial insurance covers those funeral costs as well as medical expenses left behind after a loved one’s death. How much coverage you take on will be determined by the kind of funeral arrangements you want and how much money will be needed to pay off leftover medical bills.

SSDI & workers comp

Social Security Disability Insurance (SSDI) provides a measure of financial security for much of America’s disabled population. It’s based on the number of years you’ve paid into Social Security through withholding taxes. Bear in mind that there’s a six-month waiting period before your SSDI benefits kick in, which may mean you’ll need several months of savings to bridge the gap. (If you get hurt at work, workers compensation benefits pays a portion of your wages, the amount of which depends on workers comp programs from state to state.)

Tax breaks and discounts

You may qualify for tax credits and other government benefits if you’re disabled. Tax credits include the child and dependent care credit; credit for the elderly and disabled; and earned income tax credit. Check with the Internal Revenue Service (IRS) to see what benefits you may be eligible for, and watch for disabled discounts from businesses and organizations. Take full advantage of anything that saves money. It’ll pay off, and your family will benefit over the long term.

Opening a PASS account

If you’re receiving Supplemental Security Income (SSI), you could be at risk for losing benefits if your assets exceed a certain amount. Opening a Plan for Achieving Self-Support (PASS) account lets you save money even if you’ve surpassed the SSI asset limit with no effect on your SSI benefits. The assets you set aside through PASS can help pay for services required to achieve a financial goal and help disabled people find work so they can reduce or eliminate the need for SSI benefits.

If you’re a disabled individual, insurance can help you cover much of the expense caused by your disability care and rehabilitation. But it’s also important to take advantage of government-provided breaks and benefits in saving money and affording adequate care as you grow older. Consult with your insurance agent or tax advisor to ensure you’re getting the most assistance available to you and your family.

If you have any questions, please get in touch with our team.

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