Long-term disability income insurance helps you pay living expenses while you are unable to work. This disability income insurance can help you make payments on your mortgage, groceries, utility bills, car insurance and with whatever else you need financial assistance. A long-term disability income insurance policy can also help you with any training or assistance you may need to start working again.
With a long-term disability income insurance policy, you can avoid depleting any savings you have — savings that might be used for a child's college education or for your retirement.
Before you consider purchasing a long-term disability income insurance policy, you should evaluate the benefits offered by the company you work for. Some companies will have such benefits as sick leave or workers compensation for work related accidents. For short-term injuries or illnesses, your company may provide short-term disability income insurance. Some companies provide long-term disability income insurance for injuries or illnesses lasting six months or more. Disability income insurance policies differ from company to company, so make sure you know what your company offers.
Whether your employer provides disability income insurance or you purchase the insurance through an independent insurance provider, you need to know the specifics of your policy.
Long-term disability income insurance policies vary in the amount of money you receive each month. Some policies will pay 70-80 percent of your earned wages while others may pay the more common 50-60 percent. Most long-term disability income insurance policies will not replace commission or bonus income.
If you purchase your own disability income insurance policy, your benefits are not typically subject to taxes. However, if you have disability income insurance through your employer, then the benefits are likely to be taxed.
The premiums you pay normally stay constant for the life of the policy, or the premiums may increase as you age. If you plan to keep your disability income insurance policy for a long time, having the premium stay at a constant level is probably the best choice. If you don't know how long you will have the insurance coverage, having a premium that increases with age might be the better choice.
Policies also have different waiting periods before you begin to receive benefits. You can lower the premium you pay by having your waiting period extended. Some people extend the waiting period to 90 days, six months or even longer.
Most insurance agencies will review an individual's medical and financial history before issuing a disability insurance policy. Based on this information, an insurer may offer limited or modified coverage.
There are many factors influencing the cost of long-term disability income insurance. They include: age, benefit amount, benefit period, current health status, a definition of disability, gender, optional benefits and type of job. The premium you pay on your disability income insurance policy will depend on all these factors, plus any other factors the insurance provider sees fit.
Before purchasing a long-term disability income insurance policy, make sure you examine the policy thoroughly. Know the benefits of the policy and ask the insurance agent to provide you with an outline of the benefits. Having an outline will help as you compare policies and premiums among different insurance agencies. Some features you may want to look for in a long-term disability income insurance policy are:
• Definition of disability
• Benefit amount
• Elimination period
• Benefits for partial disability
• Replacement of lost income
• Return-to-work programs
• Recurrent disability
• Cost-of-living adjustments
• The right to purchase additional coverage
Hopefully this material has provided some insightful information when it comes to looking to purchase disability income insurance.
By John Ivie