Long Term Disability Insurance

Long Term Disability Insurance: Getting the Best Possible Insurance

Long-term disability insurance is designed to pick up where short term insurance leaves off. In some cases, it picks up as soon as short-term stops, but depending on the policy, it may not start paying until after you are disabled for six months. The difficult part about the later scenario is that most short-term policies stop at around twelve weeks, so that still leaves a gap of another three months. If you know this before you need the insurance, you can make other arrangement such as paying into a medical account on a before tax basis or purchasing a policy from your own insurance carrier that will pick up as soon as short-term disability stops. Whatever you choose to do regarding long-term disability insurance, you want to plan to do it before you need it because even purchasing it while you are on short-term disability is not going to provide any coverage for that particular incident.

Making Plans for the Unexpected

Many people, especially young people, tend to push things aside that they don’t think they will need, with long-term disability being one. They don’t feel there is any need for it because they are young, and in good health, so it’s not a problem. What some fail to understand is that accidents happen (crashes, falls, accidental injuries), and some illnesses can become chronic such as a serious bout with pneumonia or a back injury requiring surgical intervention. It’s never good to assume that you don’t need coverage for long-term disability because you never know what might happen.  It doesn’t matter how young you are or how good your health is; things happen, and you have to be prepared.

Getting the Best of Long-Term Disability Insurance

If your company doesn’t offer long-term disability insurance, or if you are self-employed and don’t have the option of an employer-paid plan, there are many insurance companies that offer both long and short-term disability insurance. There are many different plans, so you want to make sure that you find one that is custom-tailored to your needs. For instance, don’t purchase a plan that pays $500 a week if you’re only taking in $400. Yes, it sounds like an easy way to make some extra income while you’re ill or recuperating from a mishap, but the price you pay for the insurance from an insurance carrier depends upon the amount of the benefit distribution. Taking an amount that is more than what you customarily bring in means you will be paying higher premiums unnecessarily. The best insurance for long-term disability is that from which you derive the most benefits, and one that allows you to collect benefits for at least two years. The reason for that time frame is that if you should become totally disabled, it will be six months before you can apply for social security, and likely at least another six months before you’re approved. In many cases, it takes over a year to be approved – three denials before approval are not uncommon.

How to Know if You Have the Best Insurance

It’s difficult sometimes to know if what you have is really the best that exists, but if you contact several insurance carriers, and read their quotes in detail, you can obtain a good working knowledge of what is available. Even if you have been with your insurance carrier since you lived with your parents, don’t assume that your agent knows what is best for you. His job is to sell insurance, and he wants to retain all of his policyholders, so he’s not our best source of what is the best insurance. Do a thorough investigation, and if your investigation shows that your current carrier has the best insurance for the money you are willing to invest, you may then purchase the policy, feeling confidant that you are making the right decision.

Be Aware of Exclusions

In all insurance policies, including long-term disability, there may be exclusions, and these items may be as simple as saying that they won’t pay if you are diagnosed with cancer within six months of the policy date. The problem with exclusions is that the condition for which they refuse to pay may be the very one you need. For example, many people are diagnosed with cancer as part of a routine annual physical, and if you only recently took out the policy, you have to wait to be covered. In some cases, the wait can be up to two years if they classify it as “preexisting” even if you didn’t know you had it. If you cannot work around the exclusions, you will at least be aware of them and can judge accordingly regarding the benefits of the policy in other ways.