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Financial pre-planning does not begin and end with the purchase of your Long Term Disability policy. That’s only the beginning!
You still have to make significant plans for your financial future.
If you suffer from a gradual onset disease like degenerative joint disease, Parkinson’s disease, Lou Gerick’s disease, multiple sclerosis or even Alzheimer’s, the disease process will give you the time you need to make significant work and financial decisions. There are a number of steps that you must take, sooner, and not later, in your financial pre planning.
1. Learn about the disease and how it progresses over time.
It is important for you to understand how your disease will impact your ability to work, how it progresses over time, what your future medical needs are going to be and when you can reasonably anticipate becoming unable to work.
The answers to these questions will impact how long you will be able to work and additionally maintain any group insurance coverage.
2. Look at your current financial condition and determine how it might change over time.
This step requires a critical look at your current financial conditions and obligations. What are your assets? Is there any disability coverage that would make the mortgage payment if you are unable to work? Or disability policies that would make the payment on vehicles? Or for consumer debt?
How much do you owe? Do you have a budget? How would the budget change if you became disabled?
Can you get your finances under control in the time frame you have available to continue working? If not, how are you going to meet these obligations?
Do you know how long it takes to get Social Security Disability benefits? When would you be entitled to Medicare? Can you afford to cover your group insurance coverage? How long can you cover your group insurance?
Is there going to be a gap in time between you running out of group health insurance coverage and becoming eligible for Medicare? Can you find alternative health insurance?
3. Set financial goals.
These financial goals can be short term or long term. Do you have flexibility building these goals as your condition changes? How are you going to be able to live on a reduced income? How are you going to get medical treatment with reduced or limited medical benefits?
4. Obtaining assistance.
It’s crucial that you understand what your Long Term Disability policy provides in the way of benefits, whether though those benefits can be reduced by various offsets, such as Social Security, how long you are entitled to benefits, and what limitations may exist on your coverage.
It’s also crucial that you understand your rights to Social Security Disability benefits and the amount of benefits you might be entitled to, including dependent benefits. Many states have a significant delay in getting Social Security Disability hearings. Your date of eligibility for Medicare will depend on the date you become disabled for Social Security Disability purposes and you need to be able to plan “backwards” for your medical coverage.
It may be necessary for you to hire a Long Term Disability or Social Security Disability attorney, but you should use this time to get your questions answered, including consulting with your insurance agent, tax advisors to financial planner.