The Long & Short of It: Disability Insurance and Why You Might Need It

It’s not something the majority of us think about (or even want to think about) but the facts are there. According to the Council for Disability Awareness, 1 in 4 of today’s 20-year-olds will become disabled before they retire. Accidents and illnesses such as cancer or heart disease cause millions of Americans to lose their ability to work and support their families.

The stress of disability is compounded by more than physical pain – far too often people must confront a new, and frightening, financial future. Voluntary long- and short-term disability insurance is one step you can take to safeguard your finances from the unimaginable.

Long-term Disability

On average, long-term plans will typically cover 50 to 70 percent of a person’s lost wages. If you work fulltime, there’s a good chance that your company offers long-term disability coverage. Often, a group plan means an employer is able to spread out the costs of this type of insurance and will cover half or more and deduct the premium from employees’ paychecks. Some companies pay the entire cost for their employees.

Speak with your HR department to find out:

  • How long you must be employed before you qualify for long-term coverage.
  • When long-term coverage would kick in (typically 60 to 90 days after your injury or illness).
  • If there are limitations to how long your disability coverage will last. Some plans will only yield five or 10 years of coverage or until you’re eligible for social security benefits.

If your employer doesn’t offer long-term disability insurance, the good news is that individual plans are fairly inexpensive (depending on your age and occupation) and can be purchased from a broker, who will explain the rules and limitations of your plan.

Short-term Disability

Short-term disability coverage isn’t offered as regularly as its long-term counterpart due to high premiums for both companies and individuals. However, the limitations, such as how long you must carry the insurance before you can use its benefits or how long you must be employed to qualify are often similar. Again, speak with your HR department or a broker for an explanation of the fine print.

Short-term disability insurance normally covers a percentage of lost income for up to six months and may be a smart option for people:

  • With known physical or mental health issues.
  • Who participate in high-risk activities (talking to you, skydivers).
  • Who have long commutes to and from work.

Another group that benefits from short-term disability coverage is women who are planning to become pregnant. If your company doesn’t offer maternity leave or benefits, the supplementary income from short-term disability insurance could provide a much-needed windfall during a very expensive part of life.

Lastly, disability insurance may be a smart, gradual option for those without an emergency fund. Small premium payments can add up to a large cost-saving benefit in the long run. However, having disability insurance is not an excuse to avoid creating emergency funds. Even if you don’t use it for health-related expenses, building up a nest egg can keep you and your family on firm financial footing.

A Frugal Feast: Entertaining for the Holidays

It’s a time of togetherness, of peace and goodwill, and it’s the time of year when many of us are getting together with our families and friends to celebrate. But don’t let party planning get your tinsel in a tangle, you can entertain or feed a houseful of guests without breaking the bank by planning ahead and getting creative in the kitchen.

Décor and More

Once the phone calls are made or the invitations are sent, get to work decorating. Some creative additions to your living room can be found in your backyard. A cut and trimmed bough of a pine or spruce tree tied with ribbon is a jolly welcome on the front door. For your table, branches from the local park can be easily spray-painted and arranged in a vase. Use dollar-store ornaments or photographs from Christmas past to add color to your centerpiece.

For sit-down meals, you can add a special touch with easy-to-make place cards. Simply glue wrapping paper scraps to the lined side of a note card, write your guest’s name and fold. Or, use pinecones to prop up your name cards. It’s special touches like this that make guests feel at home, in your home.

Eat, Drink and Be Merry

Forget about the heavy, traditional meals or intricate appetizers. Aside from the fact that your guests may already be sick of green beans and turkey, reinventing your holiday menu is an imaginative and budget-friendly alternative to the usual party fare. Say ‘Feliz Navidad’ with a taco bar. Ground beef or slow-cooked pork (just don’t tell Hank) is cost-effective and easy to make in the slow cooker. Add some bowls filled with salsa, sour cream and some shells.

What’s a holiday meal without something festive to drink, too? If you want to serve wine, you’re better off buying it by the case. Ask your local grocery store if they have any deals for large orders. Use that purchase to enliven your punch. Mix juice (cranberry or cherry, for instance), white wine and club soda in a bowl and serve with slices of lime for both color and taste.

Lastly, you can stay seasonable and reasonable and throw a “leftovers potluck.” Invite your guests to bring over whatever leftovers are taking up space in their fridge. From mix-matched six-packs to sugar cookies, your guests will be grateful to reclaim their counter tops while you’re able to feed your friends with some home-cooked goodness. It’s a win-win for everyone and a sure-fire way to land yourself on Santa’s nice list for next year.

Year-end savings are a great way to prepare your finances for the months ahead. For more savings advice, get in touch with your MCU personal finance officer. And, from all of us to all of you, we hope that your holidays are merry and bright!