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If you are below the age of 65, you are 60% more likely
to become disabled than you are to die...
Long
Term Disability Insurance: the oft forgotten
or misunderstood piece of protection.
 ...In
fact, the number one cause of bankruptcy in America
is injury or illness leading to disability which prevents
one from holding gainful employment. If you were to
ask a group of working people whether or not they
have disability insurance, most of them would say
yes. That's because they have two potential benefits
which they misinterpret as disability insurance.
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The first form of disability
coverage people usually think of is Social Security
disability, also known as SSI. This is controlled
by the government and is usually the same amount of
money you would get if you were old enough to draw
Social Security benefits. It is extremely difficult
to get, nearly always taking at least two year and
often four or more appeals before the benefit is granted.
You must be completely disabled, unable to do anything
that would earn money on even a part-time basis. You
could easily be bankrupt before receiving the benefit.
Seriously ill people often die before receiving disability
from the government.
The second form of disability is
one that larger companies provide to their employees.
Generally there are to types—the first a short
term disability clause often referred to as "sick
leave." It gives you all or part of your paycheck
for a limited number of days out of work. Long term
disability provides you with a few months, or maybe
even a year or two during which time you draw part
of your working income. The assumption is that you
will return to the job. The time period depends on
the company.
If you become permanently disabled,
such that you have to resign from your position, your
employer will not continue to provide you with an
income. When it becomes clear that you will not be
able to return to work, it is likely that you will
be terminated.
Privately owned disability plans
provide you with a portion of your income—usually
up to 80% which you can draw if you become disabled.
Usually, the premium is waived once you start drawing
the benefit. Once Social Security does kick in—if
ever—the amount you draw from your insurance
will usually be reduced. The number of years during
which you can draw benefit vary according to the policy,
but usually your disability ends once you become eligible
for Social Security.
Disability insurance provides
you with an income so you can support your family
and pay your bills while you are disabled. Health
insurance pays the hospital or doctor bill, but will
not help you with the mortgage or groceries. If you
take Disability Coverage while you are young, it is
fairly inexpensive. The premiums are also based on
the level of danger associated with you job.
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