They say that having disability insurance is as important as availing life insurance – believe it or not, that is a fact. The possibility of a person getting injured while being employed is high. Not to mention the chance of getting into an unforeseeable accident or contracting a serious illness is unpredictable. So, you might want to make the smart move and avail disability insurance, just in case.
There are a lot of insurance policies out there and long-term disability insurance is one of them and is considered as one of the most vital. Studies say that around 25% of American employees have the possibility of having a disability that will prevent them from working for more than 12 weeks.
What is a long-term disability?
Long-term disability insurance or LDT provides a portion of the income of an employee in an event where he or she sustained an injury or illness that disables him or her to go to work for a long period of time. Having an LDT will allow you to have the financial capacity to pay for your treatments and other financial obligations even when you are out of work. Usually, LDT starts its coverage when your short-term disability insurance or SDT ends. SDT takes effect right after you stop working and can last for 3-6 months. However, Long-term disability and short-term disability insurances do not cover disabilities caused by being injured at work, unlike the workers’ compensation insurance.
What are the benefits?
Most long-term disability policies provide 60% of your monthly salary, but not all of them. These policies vary depending on your health, age, career, and the coverage that you applied for. The number of years that a long-term disability policy covers also differs. Some cover only 3-10 years after you stopped working while some, which is the preferred policy, can provide you part of your income until you are 65 years old or as long as you live. Of course, availing for the much shorter coverage is more affordable than getting the longer one. Some long-term disability policies not only provide financial coverage but also services like occupational retraining – it just depends on which policy you have.
How can you avail long-term disability insurance?
Some private companies offer long-term disability as a part of their employees’ compensation package. This is part of their strategies to be able to attract applicants and also maintain their employees’ esprit de corps. However, statistics show that 69% of employees from private companies do not have long-term disability insurance. Some of these companies offer group policy rates through their company’s insurer or in worse cases, none at all. These show how some of these companies cannot afford to provide these benefits to their workers.
So what can you do? If your employer offers long-term disability group rates, avail it. Although this is not enough, it is still better than nothing and you still have the choice to apply for an individual long-term disability policy. You can choose to apply at the same insurance provider as your employer or find a different insurer. Having more choices is better in finding which offers the best long-term disability benefits. You can ask quotes from different insurance providers and compare. Usually, long-term disability policies still require you to pay the premium between 1% up to 3% of your salary. When you apply, assess your medical needs and medical history so that you’ll be able to easily find the best long-term disability insurance for you. If you can, hiring a financial advisor will be of great help.