Long Term Disability Insurance Coverage

Shopping for insurance can be unpleasant as we are forced to contemplate unpleasant scenarios which might arise in the future. No one likes to think about what life would be like should they become disabled and unable to work. The reality is, however, that one third of all Americans between the ages of 35 and 65 will become disabled for more than 90 days, according to the American Council of Life Insurers. One in seven will be disabled for more than five years. While many people think that disabilities are typically caused by freak accidents, the majority of long-term absences from the work place are due to illnesses, such as heart disease and cancer. The loss of income can be so devastating that people may lose their home to foreclosure or be forced into filing for bankruptcy. This can be avoided with long range planning when you are healthy by shopping around for the best disability insurance that fits your needs and budget.

Disability insurance replaces a portion of your income if you become disabled and are no longer able to work. A typical group plan offered by an employer will replace up to 60% of your salary. Supplemental plans and individual policies will often cover up to 70% or 80%. (No plan will cover all of your salary for fear you will have little or no incentive to get back to work.) The best disability insurance plans will, however, take a close look at your total compensation, including bonuses earned over the last 2-3 years to derive the maximum benefit. Benefits typically last until you reach retirement age since once you retire, you would no longer be dependent on the income you generated by working. Under some employer plans, you may have the option to contribute a small amount to the monthly premium in order to receive benefits tax-free. Under supplemental disability insurance policies, you pay the premium directly, so benefits are not taxable.

You will be well served if you shop around for the best disability insurance from amongst the many disability insurance providers. Based on your medical history, income and budget, policy rates will vary considerably from one provider to the next. If you are the primary income provider for your family and you would not otherwise be able to meet your obligations without your current source of income, you are truly gambling by not carrying long term disability insurance coverage. Should you get sick and be unable to work, life will become very unpleasant for you and your loved ones. This is one insurance policy you might not be able to live without.