Why You Need Long Term Disability Insurance

Most people are aware of the importance of protecting their hard-earned assets such as their automobiles, and their homes, but when it comes to protecting their income, which is the one thing that has made all of this possible, they neglect to do it. We all know that the Social Security system in America today is far different than it was when it was put into place in a few decades ago, so we should expect to receive very little assistance from it. This article will talk about some of the facts about why you need long-term disability insurance.

Long-term disability insurance is vital for anyone working in the United States today. The main reason for this is because it will compensate you for any loss of income if you could not go to work for a long period of time. If you were to become disabled, and were unable to perform the duties of your profession, without long-term disability insurance, you would stand a high probability of losing everything that you had worked so hard to accumulate over the years.

Most of the time if you are required to be out of work for a short period of time, your employer will continue to pay your salary for short time span. This period usually ranges between 1-2 years. If you are out of work for longer than that, you’re usually on your own. This is where long-term disability coverage would kick in and compensate you for your loss of income.

Most of the long-term disability plans in the United States today provide for the payment of income benefits after an elimination period has been met. After that time, the policyholder would be able to receive benefits for an extended period of time. Some of the common benefits normally found in long- term disability insurance policies are listed below.

  1. Disability benefits, which are paid when the employee is no longer able to perform their normal duties.
  2. Income Benefit, which renders disability coverage if the policyholder has been injured, or becomes sick. This benefit will reduce the work capacity as well as the consequences of a loss of income, and usually pays up to 60% of the policyholder’s gross income.
  3. Catastrophic Protection Extension. This benefit kicks in when the policyholder has experienced some form of catastrophic injury or sickness, which disables them to the point that they are required to have special care. During this type of situation the policyholder’s benefits can be upgraded to include another 40% of their gross income, which when added to their other benefits, equals 100%.
  4. Future Adjustment Option. This is a benefit that agrees to supplement a policyholder’s income coverage amount when his salary increases or his Group long-term disability coverage is terminated.
  5. Cost of Living Adjustment. This is a benefit that permits the adjustable income amount to be adjusted in proportion to the rate of inflation, allowing the policyholder to receive more money.

These are just a few of the benefits that can be experienced from having a long-term disability policy in place. Although most of us are covered for some type of short-term disability coverage on our jobs, it is always a good idea to have a supplemental plan that will work in conjunction with what we already have.