If you’re on short term disability, managing your finances can be harder than anticipated because your earnings will not be the same as your usual paycheck. With proper planning and coverage, however, you can keep your earnings on short term disability similar to your regular earnings.
Whether it’s due to complications from COVID-19 or another illness or injury, here are some tips for managing your finances when on short term disability.
Find Financial Relief from Government Programs
First and foremost, you’ll want to know what income-replacement insurance options are available to help you offset your loss of income. This includes:
Get Disability and Income Replacement from Your Employer
Your employer may also offer short- and long-term disability insurance, workers’ compensation or voluntary supplemental health insurance products like accident insurance. These products work differently from one another, but their purpose is to help replace lost income resulting from an illness or injury.
Be Proactive: Things to Do in Advance
Many people falsely assume they’re invincible, especially when they’re young. In reality, one in four 20-year-olds will become disabled before they retire due to complications like injuries, cancer, mental health problems and heart attacks. Therefore, it’s important to be prepared.
Here are a few things we recommend for everyone, regardless of age and health:
We also recommend talking to your financial advisor about disability income insurance. This type of insurance provides income to individuals who can no longer work because of a disability. This income protection will allow you to bring home most of the money you normally earn so that you can maintain your same lifestyle and continue paying your bills.
To discuss disability income insurance and if it’s something you should have, contact Leonard Financial Solutions today.
Whether it’s due to complications from COVID-19 or another illness or injury, here are some tips for managing your finances when on short term disability.
Find Financial Relief from Government Programs
First and foremost, you’ll want to know what income-replacement insurance options are available to help you offset your loss of income. This includes:
- Social Security Disability Insurance (SSDI) supports individuals who are disabled and have a qualifying work history, either through their employer or a family member.
- Supplemental Security Income (SSI) programs provide basic financial assistance to older adults and individuals with disabilities with limited resources and income.
Get Disability and Income Replacement from Your Employer
Your employer may also offer short- and long-term disability insurance, workers’ compensation or voluntary supplemental health insurance products like accident insurance. These products work differently from one another, but their purpose is to help replace lost income resulting from an illness or injury.
- Disability insurance pays a percentage of your salary until you’re able to work again.
- Workers’ compensation provides benefits to offset your expenses and lost income following an on-the-job injury.
- Critical illness insurance usually gives a lump sum payment based on your diagnosis.
- Accident insurance also gives a lump sum payment based on your injury.
Be Proactive: Things to Do in Advance
Many people falsely assume they’re invincible, especially when they’re young. In reality, one in four 20-year-olds will become disabled before they retire due to complications like injuries, cancer, mental health problems and heart attacks. Therefore, it’s important to be prepared.
Here are a few things we recommend for everyone, regardless of age and health:
- Set a budget and stick to it. This prevents you from living outside of your means.
- Prioritize credit card payments. You should always pay something, even if it’s just the minimum.
- Research and be aware of your employer’s policies. Ideally, you should do this before accepting the job.
- Take care of your physical and mental health. The healthier you are, the less likely you are to suffer an illness or injury while at work.
- Maximize your savings. By putting away money each month, you’ll have a rainy day fund to rely on if you can’t work.
We also recommend talking to your financial advisor about disability income insurance. This type of insurance provides income to individuals who can no longer work because of a disability. This income protection will allow you to bring home most of the money you normally earn so that you can maintain your same lifestyle and continue paying your bills.
To discuss disability income insurance and if it’s something you should have, contact Leonard Financial Solutions today.
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