I’m going to tell you a personal story about my experience with disability. Back in the early ’90s I was eligible for a paltry $600 benefit from my employer as a disability payment. This was hardly enough to cover the expenses that I was obligated to pay at the time.
A personal finance columnist for my local paper had just done an article about disability that was skewed toward white-collar workers. I asked her, via mail, if she had ever done anything on disability for blue-collar workers. She had not. Plying a blue-collar trade often means that your chances of becoming disabled increased because of the nature of the work (whereas, most disability policies focused on becoming disable from events that did not come from work-related problems). So I began my search for a policy that would pay me in addition to the existing policy.
This was no easy task. The group policy I was on did not allow me to increase the benefit I would receive. This forced me to find a policy to compliment the group policy. What I found out was daunting. This sort of policy would be expensive.
My research uncovered some interesting facts. One, I already had a disability benefit built into my Social Security. (Every year, your benefit potential is mailed to you prior to your birthday and outlines various scenarios for payments from what I would receive if I drew on the program early, waited until full retirement or became disabled.) This payment seemed adequate enough to cover my family’s needs at the time.
So I called the SSA and asked what it would take to receive permanent disability. This requires a hearing, which can be difficult to get and even harder to prove. The SSA representative I spoke with suggested that to be truly disabled, you would literally be knocking on death’s door. It was a bit of an exaggeration but at least it gave me some insight on what to expect.
So I found an agent who represented Provident (now Unum Provident) and asked if he would strike the following deal with his company: if I were to get a policy from his company, would they be willing to take a bet with me? The gamble was laid out in the following way: they would pay me a benefit of $1,000 a month, with a cost of living adjustment and if SS deemed me eligible for their benefit, they would be off the hook for their obligation by reducing what they owed me by 80 percent. The policy would last for five years and if I was unable to return to work, they would retrain me in another job.
