Long-Term Disability Insurance

Long-Term Disability Insurance: Is It Essential?

Most people have never heard of long-term disability insurance, but it is something that many should consider. Long-term disability insurance will pay your income while you are unable to work due to a physical or mental illness. It is not cheap, so I want to give you some information about the different types of policies & how they work before you make any decisions on whether or not to buy one for yourself.
Disability Benefit

What Is Long-Term Disability Insurance?

Let’s dive in!

Long-term disability insurance is a type of policy that will pay you if your illness or injury prevents you from working. You may wonder why anyone would need this if they have health coverage for things like surgery, hospitalization, and doctor visits since those typically don’t last more than six months.

However, there are many different types of illnesses and injuries where an individual cannot work regardless:

  • People with depression1 who can no longer manage their own affairs
  • People who develop chronic pain which prevents them from doing even light housework
  • Individuals dealing with Alzheimer’s disease2 which impacts mental health capacity in addition to physical ability.

What Are the Benefits of Getting Long-Term Disability Insurance

Long-term disability insurance provides financial stability in the event that you are unable to work. If you have a policy, then your income and medical expenses will be taken care of even if it lasts for years.

It is also cost-effective because most policies can pay out as much as 75% of your salary while insured so long as certain conditions apply

What does this mean?

This means that there would still be some money coming into the household which could help with other bills or living costs should the policyholder become too sick or injured to continue working.

This type of coverage has been likened to car insurance: no one plans on getting into an accident but when they do, at least their vehicle is covered and they don’t have to worry about paying for all of the repairs.

What Does Long-Term Disability Insurance Cover?

Long-term disability insurance will typically cover any type of injury or illness where you are unable to work. This includes illnesses, pregnancy, and injuries such as heart attacks that can result in long-term disabilities.

There may be a waiting period before the policy kicks in which could span anywhere from 30 days up to one year depending on the company and what their eligibility requirements are for your particular situation.

You see:

Most policies also have provisions whereby if they become aware of something before it becomes an issue (such as diabetes), then there is no waiting period at all so coverage begins immediately once the policyholder has been approved for purchase.

The monthly premiums vary widely based on factors like age and medical history but most people find it relatively affordable when weighed against the potential maximum benefit.

How Long Does Long-term Disability Insurance Policy Last?

The length of time disability insurance lasts varies based on the policy and what is covered. Typically, most policies will provide coverage for up to two years with some lasting as long as five or six depending on the company’s requirements.

Now:

If you are not satisfied with your current policy, then it may be possible to renew once your contract has lapsed.

However, there are many companies out there that do require a waiting period before another one can be purchased so make sure you know how this works ahead of time if you want to switch from one provider to another in the future.

Does Your Employer Offer Disability Insurance?

Many employers offer disability insurance as part of their additional benefits package but it is not required by law. Even so, this type of coverage can be a great way to supplement your current savings should something happen and you are unable to work for an extended period of time.

Moreover,

It may also mean that there will be more money coming in the event that you need long-term care or if your spouse becomes disabled during his or her working years which would allow him or her to continue on with employment uninterrupted while providing financial stability at home.

Common Questions

Is Long-Term Disability Insurance Worth It?

How Long Can You Stay on Long-Term Disability?

What Qualifies As a Long-Term Disability?

What Happens to Long-Term Disability (LTD) Insurance if You Lose Your Job?

In conclusion

In a nutshell,

Long-term disability insurance provides financial stability in the event that you are unable to work. If you have a policy, then your income and medical expenses will be taken care of even if it lasts for years.

It is also cost-effective because most insurance policies can pay out as much as 75% of your monthly salary while insured so long as certain conditions apply.

This means that there would still be some money coming into the household which could help with other bills or when the cost of living increases should the policyholder become too sick or injured to continue working.

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