It is difficult to imagine what would happen if an injury or illness prevented you from being able to work and earn an income. The truth is that it happens more often then you probably would think. For this reason, Disability insurance is something that every person should have and review every so often. It is important to make sure that if the unexpected occurred, you would have enough Disability insurance benefit to cover your expenses and help your family maintain a similar quality of life.
As a Federal Government Employee, once you have completed 18 months of service, you have Disability insurance provided through the FERS Disability insurance program. This is a benefit that the Federal Government provides to each of its employees at no cost to you. Interestingly though, most Federal employees are not even aware that they have FERS Disability insurance and those that are aware usually have no idea what type of benefit it provides.
FERS Disability insurance provides Federal Government workers with a base level of income protection. If an injury or illness prevents you from working, FERS Disability insurance will provide you a monthly benefit to assist in maintaining your current lifestyle. Without going too far into detail, your income is covered at 60% during the first year of a disability claim and will reduce to 40% for each year there after. Since the Government is paying the cost of this insurance, any benefits received during a claim will be taxable as ordinary income. Essentially this means that your true level of coverage is closer to 45-50% in the first year and 30% in each year thereafter.
There is not really a question of whether this percentage of income replacement is sufficient or not. I personally do not know anyone who is capable of surviving on 30% of his/her current income. For this reason, it is important that Federal Government employees consider supplementing their FERS Disability insurance.
The insurance industry has made some recent changes regarding the options Federal government employees have in supplementing their FERS Disability insurance. Although there are still some restrictions and limitations on benefit amounts, policy options have become much more generous then in the past. Today we are able to provide Federal government workers with multiple options from multiple insurance carriers.
Protecting your income is one of the most important and responsible things a person can do. Supplementing your FERS Disability insurance with individual insurance is equally important. Learn more about FERS by visiting FERS Disability insurance and consider supplementing your income protection with individual Disability insurance.