Long-Term Disability Choices
No one wants to think that they will experience a major disability that will hinder their ability to work, yet many buy life insurance to protect their families upon death. While having life insurance is a solid idea, having disability protection may prove to be much more important. Studies have shown that one-third of Americans between the ages of 35 and 65 will suffer a disability, and people of any age are way more likely to become disabled than they are to become deceased.
Many feel that having worker's compensation will take care of the likelihood of disability, or that Social Security will cover the care of any unforeseen accidents. Yet, worker's compensation will only take care of costs if the disability is job-related, not if you are in a serious car accident or become disabled due to a debilitating disease. And while Social Security does cover those who are severely disabled, meeting the criteria can be challenging and time consuming. In addition, many find that once they have qualified for Social Security, the amount of money received is not enough to meet living and medical expenses.
While it's easy to be an optimist when you are feeling strong and healthy, statistics show that getting disability insurance may be the healthiest thing you can do to insure financial stability. Before you go out and purchase a long-term disability coverage, take the time to investigate your options and find out what is available.
The first place to look is to your current place of employment. You may find they offer long-term coverage that offers a fraction of your pay for an extended period of disability. And while long-term disability coverage from your employer is a good idea, check pricing and remember that they are only paying you a percentage of your current pay, which is still taxable income. Check with your human resources department to find out different plan options and inquire about their policies on supplemental coverage.
Whether you find that you are comfortable with your employer offered long-term coverage, opt for a plan from another source, or decide to do a couple of different plans, you should read the coverage limitations sections very carefully. Many plans have limitations, and do not cover mental health issues or preexisting health challenges.
Find out if Social Security Disability payments are being factored into your plan. If so, this means that your long-term care will pay you less, if you are receiving Social Security.
Find out if your plan will be non-cancelable or guaranteed renewable. With non-cancelable policies, your insurance company cannot cancel your coverage or raise your premiums as long as you are responsible with payments. Guaranteed renewable policies are similarly stable, meaning that your policy cannot be canceled or changed as long as you pay your payments on time. Although, with a guaranteed renewable policy, the insurance company can raise the premiums, as long as it does so for an entire class of people. For example, if you decide to change jobs or move to another state, your insurance policy can be affected.
Conditionally renewable plans are the least secure, because they allow the insurer to change the plans and the premiums at any time, for any reason.
Before choosing a long-term disability provider consider their policies, industry rating, reputation, costs, exclusions, waiting periods and processes. If you are one of the Americans that have to deal with disability sometime in your life, you will be glad that you did.
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