Learn how disability insurance works

Long Term Disability Insurance for Individuals

Filed under: Disability Insurance — Alston @ 12:13 am January 29, 2011

Disability insurance is probably the most overlooked important type of individual or personal insurance. Although many have less life insurance than they need, few have any disability insurance at all.

With a good long term individual disability insurance policy, you can continue to stay in your home, eat the same food and maintain the same standard of living even if you are too sick or injured to work. Without disability insurance coverage you have far less security; you can wind up in a desperate situation without the income that these policies provide. Many people lose their homes after a prolonged illness.

People often fall into the trap of thinking that if it was important it would be included in the insurance benefits package paid for by my employer or by the government. This is a dangerous way to look at the issue.

The newly self-employed are often quick to replace their health insurance, but few people think about getting insurance to protect their monthly incomes.

Social Security does provide disability benefits to some but few will find the monthly income the program pays adequate. The benefits are poor and are hard to get. Few qualify and most have to wait a period of over two years to receive their first check.

Disability insurance coverage may be provided by your job, but it may not cover you fully. Many group disability policies will only pay you over for a short period of time. However, many people get injuries and other maladies last for years and years. If you don’t have long-term disability insurance you probably won’t get paid by anyone. And you may wind up not being able to pay your rent or mortgage.

Another problem with group disability insurance is that it isn’t portable. It may be included in your insurance benefits package so long as you stay with the same company. However, if you quit, retire or get fired you will probably lose your group disability insurance.

Since you can be denied disability insurance if your health history doesn’t meet their standards. This can mean that if you wait until you change jobs to apply for income replacement insurance, you will not be eligible from a health standpoint. Even if your health does not change, your cost for the policy will be more if you wait until you have another birthday

For these reasons buying your long-term disability insurance as an individual as opposed to as an employee is critical if you are to keep your home and protect yourself and your family.

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