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Debunking Long Term Disability Insurance Myths

Disability Insurance is one of the most commonly misunderstood necessities of modern living. Also known as payment protection, this affordable coverage protects you from one of life’s real risks – becoming disabled such that you cannot work and cannot support yourself and your family for a significant period of time. 

Here are the most common myths about disability insurance: 

Myth #1 -The Government Has You 100% Covered.
FACT:  Federal FERS employees do have FERS Retirement Disability coverage, but it is limited. For example, you must be employed for at least 18 months and your disability must be expected to last at least a year to receive payments. The FERS Disability Annuity is taxable. The first year of payments covers 60% of your base pay and coverage drops to only 40% in the second year and any year thereafter until reaching retirement age.    

Myth #2 – The odds of becoming disabled are very low.  Therefore, I do not need disability insurance.
FACT: If you are like most working individuals, you think the chances of becoming disabled for an extended period due to an injury or illness will not happen to you. In 2020, the U.S. Social Security Administration reported that more than 25 percent of 20-year-olds will experience a disability that keeps them out of work for at least a year before they reach retirement age.1  

Myth #3 – Long Term Disability Insurance is like Worker’s Compensation
FACT: Worker’s Compensation only pays benefits if an accident occurs on the job. A benefit from Long Term Disability Insurance does not require a work-related incident. 90% of disabilities are caused by illness, not accidents2. Back injuries, cancer, heart diseases and other illnesses cause the majority of long-term absences. 

Myth #4 – I’ll Rely on My Savings if I Cannot Work for a While
FACT: Do you have enough resources to survive without your income for three or more years? The average disability claim lasts 34.6 months2. Only 48% of American Adults indicate they have enough savings to cover three month of living expenses in the event they are not earning any income3. Without a paycheck, you may lose your home, exhaust savings and incur debt to pay your bills. 

Anyone who relies on earning an income to support themselves and loved ones should consider getting a long term disability insurance plan.  Your ability to earn a living is widely viewed as your most valuable financial asset.  You insure your car, your home, your health – shouldn’t you also insure your paycheck? 

GEBA’s Group Long Term Disability Insurance underwritten by New York Life Insurance Company provides tax-free income4 in the event that you cannot work due to a covered accident or illness. Spouse/domestic partner coverage is also available. 

Don’t put it off any longer.  You can apply online at www.GEBA.com/LTD

If you need assistance, please call GEBA Member Services at (800) 826-1126. 


1 Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 2000. https://www.ssa.gov/oact/NOTES/ran6/an2020-6.pdf
2 Deborah L. Meyer, C. (2020, September 09). Are you underestimating your need for disability insurance? Retrieved April 12, 2021, from https://www.kiplinger.com/article/insurance/t012-c032-s014-dont-underestimate-need-for-disability-insurance.html
3 Employee Benefit Research Institute, “The 2020 Retirement Confidence Survey,” 2020 https://www.ebri.org/docs/default-source/rcs/2020-rcs/2020-rcs-summary-report.pdf
4 Consult your tax advisor

Group Long Term Disability is underwritten by New York Life Insurance, 51 Madison Avenue, New York, NY 10010 under Policy Form GMR.  Visit www.GEBA.com/LTD for features, costs, eligibility, renewability, limitations, and exclusions. 

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