Long Term Disability Income Protection

 As with most types of insurance, the older you get the more expensive the coverage will become. Statistically you may be more likely to become disabled, as you get older. It is not guaranteed that you can be insured and as you increase in age; this will affect your ability to acquire a policy. Most importantly an accident or debilitating illness could strike at any time.

 You should consider obtaining enough coverage to maintain the present lifestyle your family has. This means taking into account rent or mortgage payment, food, automobiles and other monthly expenses. You should be aware that income from Social Security benefits or employer related plans most likely would not come close to covering your expenses. Typical policies range from 60 to 70 percent of pre-tax income.

 The table below calculates what your potential earnings may be up to age 50. Thus if you were to become disabled at age 35, and your monthly income was $3,000 per month, you would face a lifetime loss of $1,460,451.00 in wages.

There are many different plans with different options on this. The best plan would be one that will replace the lost income until you are 65 years of age. Any other will not meet the demands of your financial obligations.

This will be a critical element to any policy that you purchase and with each policy the definitions will vary.

You should consider a plan that defines "disabled" as being unable to continue in your present occupation. Most workers have obtained a skill that pays them at a salary reflective of that. A good policy is going to replace the income that you would have lost if you are no longer capable of that earning power.

There are plans that call for you to be unable to perform, "any occupation". These should be avoided, as they are not reflective of your loss.

An elimination period is similar to the deductible on an auto policy. It will be the amount of time, generally quantified in a number of days, where you will have to wait until benefits are paid. As in an auto policy this will have a direct effect on the cost of your premiums.

A typical Elimination period would be approximately 90 days. This means that in order to be protected, you would need to have your own financial resources to last 90 days without any income.

Please Note: you will not be able to qualify for Disability Insurance if you are:

• Pregnant or soon to be pregnant
  
• Unemployed
  
• Earning less than $18,000/year
  
• Required to carry a weapon for your job
  
• Looking for individual short term coverage

1. A Disability Insurance Policy will pay you a monthly amount if you become disabled and can no longer work, or perform your job, in order to earn your income.
2. Disability Ins. safeguards your personal financial health by providing the needed income for all of your monthly bills from groceries to mortgage payments which would still be due, month after month.
3. Your policy can help ensure that your family can continue to live in their home despite the inability to make mortgage payments because of illness or an accident, more coverage then just Social Security can.
   
4. Unfortunately, sometimes a people are disabled for life and can't earn an income that would maintain the lifestyle they are use to. There are forms of disability insurance that will offer, so you will be able keep the lifestyle you are accustom to.
   

"I am in good health, I know I can earn a living."

This is a common misconception. People can become disabled in many ways; workplace injury, car accident or the onset of a debilitating medical condition. Statistically between the ages of 35 and 65 seven out of ten people will become disabled for three months or longer.

"Won't Social Security help me?"

Social Security benefits are extremely difficult to qualify for and take a great deal of time to finally start. You must prove that not only are you incapable of performing your usual occupation but any occupation. In addition, the benefits most likely will not meet your financial obligations. The maximum payment for a 30-year-old earning $70,000.00 per year is $1,600.00 per month.

"What about employer provided group disability or worker compensation coverage?"

Workers compensation only covers individuals that have been injured on the job and those benefits are typically quite low and do not come close to covering your earnings. Group disability plans through an employer are not prevalent, less than 41 % of companies with over 100 employee's and less than 19% of companies with under 100 employees provide this coverage. Also these benefits will not be adequate to replace income.