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Individual, Long Term Disability Insurance: Keeping Your Family Safe When Your Become Disabled

Long term disability insurance is a type of insurance that will replace up to 80% of your income if you should be come disabled. Chances are, if you work for a large company, your employer has a limited form of disability insurance, but it will probably not pay for more than a year or two.

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Most employers do have short term disability insurance, also known as “sick leave.” It is usually limited to a certain number of days per year and simply gives you all or part of your pay for those days off. Generally, you can use them for either yourself or an immediate family member—such as a sick child. If you don’t use them, you lose them, although a few companies will allow you to accumulate unused sick leave and exchange it for early retirement, vacation days, or cash benefits.

Long term disability is a different animal. From the company perspective, it is usually tied in with your health insurance, as long as your problem is not a workmen’s comp case. All of the employees pay into it, and you usually have to be completely unable to work in order to collect, although some companies will allow you to re-train for another job or even work part time while collecting a partial benefit. The problem with relying on your employer is that the benefit will disappear if your company goes out of business or changes insurance companies. Also, it will have a time limit ranging from a few months to about two years. Some companies—usually those tied in with state health plans—will allow you to collect state disability (not to be confused with SS disability) until you reach age 65 or begin to draw your Social Security.

Individually owned long term disability will provide you with an income independent of your employer. You probably will not be able to collect from both your employer and a private policy, so you want to use up the employer benefits first and then activate your private policy. The benefits paid will be determined by your premium. Usually, however, your premium is waived once you need to begin collecting benefits.

Disability insurance is an extremely important part of family planning, but it is often overlooked until too late. According to government statistics, you are 60% more likely to become disabled than you are to die if you are under age 40. Furthermore, the primary cause of mortgage foreclosures and homelessness is not irresponsible borrowing (as the current news trends would have you believe) but an inability to keep up with bills because of an illness or disease that resulted in the loss of the primary wage earner’s income.

Don’t become a victim of a situation that you could have controlled. Check here for quotes from an agent who will be able to analyze your situation and help you make sure your family is protected.

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