4 Reasons Why You Shouldn't Rely on a Broken Government Program
If you value your income and lifestyle, then you need to make sure that you have some sort of plan in place to protect it. When there is no plan, disastrous results can happen when life throws you a curve ball that you weren’t prepared for.
Unfortunately many people don’t plan ahead, and this can be for a few reasons. Maybe they don’t know where to start, so they just do nothing. Or they think that nothing will ever happen to them that affects their ability to work or make an income, so they just don’t think a plan is necessary. In many cases though it’s because they make assumptions. They assume that if anything ever happened to them and they weren’t able to work that there are government programs available to help them out and replace the income they’ve lost. And this is when they find out in the hardest way possible that maybe they should have taken a different route.
It is in your best interest, both in the quality of care that you will receive, and also from a perspective of having control over the options that you have available to you, to make sure that you are not relying on government programs to pick up the pieces. If you're relying on the government, that means you're working on their timetable, under their rules, and they will dictate the details. Not a good place to be.
What would happen to you financially if you were injured or got sick and were unable to work? Really think about it. What would you do to pay the bills? Unfortunately we don’t live in a world where the bills stop coming in if we’re going through a rough patch financially. The mortgage still has to be paid, the car payment is still required, the kids need to eat. It’s a serious risk that you need to protect yourself against.
We’re human, and with that comes the mind set that “it’ll never happen to me”. We never want to think that something bad is going to happen to us or that our health might take a sudden turn for the worse. But as we get a little older we tend to get a little wiser and realize that we’re not untouchable.
My father was a general contractor who owned his own business. It’s a very physically demanding occupation. By the time that my father hit his 60’s, he had a bad back, and both knees were shot as well as both shoulders. This resulted in him needing two knee replacement surgeries, as well as shoulder replacement surgery on one side. My brother went into construction as well, following in the footsteps of my father, owning his own business. Never did my brother expect to be told by his doctor that in his 30’s, the severe pain he was feeling in his shoulder was the result of the joint being bone on bone. An entire shoulder replacement was needed. The doctor told him he had never seen that in someone so young. But he’s self-employed. If he doesn’t work, he doesn’t get paid. If it gets worse and he can no longer tolerate working with his shoulder what does he do?
This is exactly the type of situation that we’re talking about. None of us know what life is going to throw at us, which is why we need to put plans in place to safeguard against these types of risks. But why is relying on a government program not the way to go? Here are four reasons:
Social Security Disability – This program pays disability benefits independent of whether the disability happens at work or not. Social Security is on the verge of going bust, and there is no guarantee that it will continue to be there down the line. Laid off workers and aging baby boomers are flooding the program with benefit claims, pushing the already strapped program toward the brink of insolvency. There is such a backlog of applicants that many wait as long as two years to get their cases resolved. In the meantime, you're on your own!
Workers Compensation – You can cross this one off of your list as this government program cover you ONLY if you get hurt or sick as a result of your job. According to the National Safety Council, 90% of disabilities occur outside the workplace, so chances are this won’t even be an option for you. Plus, talk to anyone whose ever had to deal with workers comp and they will quickly tell you what a broken, convoluted, frustrating system it is to deal with.
The “Definition” – The federal government defines a disability very narrowly as “the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.” (heavy sigh). There are no benefits for short-term or partial disability. You’re on your own.
That’s It? - Let’s say you were to qualify . . . did you know that the average benefit hovers around $1,000? That would give you an annual “income” that’s below the poverty line. Will that be enough to sustain your lifestyle?
Hopefully this has made you rethink your need to protect your income in the case of a disability. Just ask yourself this: How long could I go without a paycheck before it starts causing me problems? Then take the next step and talk to an agent about disability insurance. It's entire purpose is to replace income that you've lost because of a disability or injury. Your future self will thank you.
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