updated 12/9/2010 9:16:40 AM ET 2010-12-09T14:16:40

NEW YORK, Dec. 9, 2010 (GLOBE NEWSWIRE) -- A recent announcement by the Social Security Administration that beneficiaries will see no increase in their benefit checks for the second year in a row underscores the wisdom of securing individual disability income protection before you need it, said The Guardian Life Insurance Company of America (Guardian).

Nearly 10 million Americans on Social Security actually receive disability, not retirement, benefits. Cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was enacted by Congress in the 1970s. The Labor Department's release of inflation numbers earlier this fall indicated that consumer prices are still lower than they were two years ago, when the last COLA was awarded: hence, no increase to 2011 benefits.

"The official absence of inflation isn't much comfort to those Americans receiving disability benefits whose savings and home values haven't recovered from the recession," noted Lawrence S. Hazzard, Vice President of Product Strategy at Berkshire Life Insurance Company of America, the Guardian company that issues individual disability income insurance.

"Having personal disability insurance in place offers a measure of control over maintaining your standard of living if injury or illness prevents you from working," Hazzard added. "And, the best individual disability income policies allow you to customize your coverage to avoid the type of economic uncertainties currently faced by Social Security recipients."

For example, Guardian's policy features a Cost of Living Adjustment Rider with three options from which to choose:

  • Four-year delayed -- Guardian will increase your monthly benefit each year by 3% compounded. Increases begin on the fourth anniversary of the date you originally became disabled.
     
  • Fixed 3% -- After you've been disabled for 12 months, Guardian will increase your monthly benefit each year by 3%.
     
  • Up to 6% -- Guardian will increase your monthly benefit each year according to changes in the Consumer Price Index. Increases will be no lower than 3% compounded and no higher than 6% compounded.

"These are COLA options that you control," Hazzard emphasized. "Whether you're totally disabled and unable to work, or partially disabled and not earning what you did before your illness or injury struck, you want to protect the 'buying power' of your disability benefit against the uncertainties of the economic landscape, regardless of what Washington says."

Guardian also has provisions to preserve your policy's value while you're still healthy, such as a Future Increase Option (FIO) Rider that allows your policy to grow with your career. Obtaining additional coverage to protect a growing income normally requires providing evidence of good health each time you apply. But, with the FIO Rider, ProVider Plus policy owners are eligible to purchase additional coverage each year until age 55 with no medical insurability requirement.

Likewise, an Automatic Benefit Enhancement (ABE) Rider provides automatic 4% compound increases to your individual disability policy's monthly benefit. Opt-in increases occur each year for up to five years despite any change in health, income or occupation. Unlike the COLA or FIO Riders, there is no need to apply for the ABE Rider, and you are free to opt out from the benefit increase (and corresponding premium increase) each year. The rider simply terminates after two consecutive increase declines.

Supplemental Options No Replacement for A Primary Solution

Even in the best of economic times, Hazzard said, breadwinners shouldn't assume that Social Security replaces their need for individual disability income insurance.

"Just as Americans have come to realize that they need to save for retirement throughout their working years and that Social Security retirement benefits on their own will not be adequate for a comfortable retirement, they need to understand that Social Security and other potential sources of income after a disability -- like a spouse's salary, personal savings and worker's compensation -- are supplemental options at best, because they can eventually be depleted and eligibility isn't guaranteed," he stated.

"Especially given how difficult it can be to even qualify for Social Security disability benefits, an individual disability income insurance policy is the best way to prepare for a potential long-term illness or injury."

About Guardian

A mutual insurer founded in 1860, The Guardian Life Insurance Company of America and its subsidiaries are committed to protecting individuals, business owners and their employees with life, long term care insurance, disability income, group medical and dental insurance products, and offer 401(k), annuities and other financial products. Guardian operates one of the largest dental networks in the United States, and protects more than six million employees and their families at 120,000 companies. The company has more than 5,400 employees in the United States and a network of over 3,000 financial representatives in more than 80 agencies nationwide. For more information about Guardian, please visit www.GuardianLife.com .

CONTACT:  Guardian
          Wendy Webster Coakley
          413.395.4467
          wendy_coakley@glic.com

          Harden Partners
          Christine Cannon
          631.776.0247
          ccannon@hardenpartners.com

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