The answer to that question is different for everyone, but for most Americans it’s not very long. In a national survey, the Federal Reserve Board found almost half (48 percent) of U.S. families save none of their annual incomes and 68 percent of adult Americans have no money set aside for emergencies. 1
It’s important to understand how long you could continue to cover your necessary living expenses if you are unable to work for an extended period of time. Here are five questions to ask yourself:
1. What are my “necessary” monthly living expenses that would continue even if my income stopped? For most people, that means things like rent or mortgage, utilities, child care, groceries and gas.
2. How long would my personal savings cover those necessary monthly expenses – one month, three months, six months, a year?
3. What other expenses will I have if I’m sick or injured in addition to my necessary monthly living expenses? For most people, that primarily means out-of-pocket medical costs (i.e. deductibles and/or co-pays).
4. How much sick leave have I accrued in my job and what is my district’s differential pay policy (i.e. how much differential pay will I earn and for how long)?
5. Am I currently participating in a disability insurance plan? If so, when would benefits start, how much would it pay me and for how long? If not, do I have access to affordable group coverage? Hint: As a CTA member, you may be eligible for the CTA Voluntary Disability Insurance plan offered by Standard Insurance Company (The Standard).
Once you’ve answered the questions above, you can start to plan for how you would get through a period where you can’t work due to a disability.
Think it Won’t Happen to You?
Most people think they won’t ever get sick or hurt badly enough to miss significant work time. But during the 2012-2013 school year, the CTA Voluntary Disability Insurance plan paid benefits for nearly 4,400 disability claims filed by CTA members.2 The average claim that year lasted 110 days.2 For non-maternity claims, the average duration was 153 days, and more than 500 claims lasted 200 days or longer2 – more than six months off of work! The benefits received by these members went a long way towards helping them cover their necessary monthly living expenses.
Participating in a group disability insurance plan is often one of the most cost-effective ways to protect yourself, especially if you don’t have much personal savings or don’t have a lot of accrued sick leave. And the CTA plan offers some useful benefits, even if you have built up significant sick time:
$25 benefit per work day paid in addition to your sick pay when you are on fully paid sick leave. This benefit can total $500 or more in a calendar month, and can be used to help cover additional expenses like health insurance deductibles and co-pays.
$35 per day in addition to any other benefit payable when you are a registered, in-bed patient in a hospital.3 Almost 60% of the disability claims paid by the plan during the 2012-2013 school year also received a hospital benefit payment. 2
To learn more about the CTA Voluntary Disability Insurance plan, including costs and further details of coverage such as any exclusions, limitations, reductions and benefit waiting periods, as well as the terms under which the policy may be continued in force, CLICK HERE or contact The Standard’s dedicated CTA Customer Service Department at 800.522.0406, Monday through Friday from 7 a.m. to 6 p.m.
1. U.S. Federal Reserve Board, Survey of Consumer Finances, 2010
2. Claim data compiled by Standard Insurance Company, 9/1/2012-8/31/2013
3. Up to a maximum of 60 days during the first two benefit years only; note that the definition of hospital does not include nursing homes, convalescent homes or extended care facilities.