Looking for Disability Insurance? Try This

Disability insurance was long thought to be an entitlement in both the public and private employment sector. But not any more. Studies show that employers are increasingly less likely to include disability insurance in employee benefit packages — leaving more and more workers on their own. If that means you, then you’ll need these handy tips to track down the best disability insurance for you and your family.

First the bad news. According to LIMRA, a think tank and research center based in Windsor, Conn., company contributions toward employee disability insurance dropped to 48% in 2009 — that’s down from 59% in 2002.

Unfortunately, that decline in employer-backed disability programs comes at a time when disability claims are on the rise. According to the Social Security Administration, disability claims have climbed from 2.6 million in 2007 to 3.3 million in 2009. Plus, the SSA estimates that Americans have a one in five chance of becoming disabled.

So there you have it. More need for disability insurance but less paths to getting it. And that increasingly leaves Americans on their own.

Where to start? See if you can chip away at the cost of disability. The insurance giant General Re LifeHealth (Stock Quote: BRK.A) estimates that the average annual cost for new disability insurance is about $238. To get your cost-cutting program rolling, check if there is any government aid available to you. The Social Security Administration ususally only offers disability insurance to those suffering from a malady that is expected to keep them out of work for one year or more (and to individuals with terminal illnesses).

But the SSA says that it approves 36% of disability insurance applicants, and covers 40% of their annual income on average. Get going early — it can take up to five months to get the green light from the government. While you’re waiting, check to see if your state has any disability programs, too.

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