Long-term insurance is designed to cover your living expenses if you become disabled. However, the insurance company does not start paying benefits immediately if you become seriously ill or injured. You must meet a specific definition of disability for a certain period of time (usually 90 to 180 days) before your benefits begin. This time period is called the waiting period or elimination period.
How is disability defined for long-term disability?
The definition of disability is covered by your long-term disability insurance and depends on the type of policy you have. The two basic types of long-term disability insurance are:
- Own profession: In this type of insurance, disability is defined as the inability to work in your regular profession. You should be entitled to benefits even if you can perform any other type of job.
- Every profession: Disability is defined in this case as the inability to work in all professions. To be entitled to benefits, you must prove that you cannot work in any type of job.
What do you do during the waiting period if you become disabled?
Many people choose to have both short-term disability and long-term disability insurance. If you have both, you can receive short-term disability benefits for most of your long-term disability. Usually, the waiting time for short-term disability is only seven to fourteen days, and the benefits last throughout the long-term waiting period. When short-term invalidity benefits expire, people who have both types of insurance can usually switch to long-term benefits.
How much does long-term insurance cost?
Prolonged disabilities can be due to various factors, including your age, health and occupation, and they can vary considerably from one provider to another. Our experienced agent can help you find the insurance you need for the lowest available premiums.
Generally, the cost will be about 1
Factors Affecting the Cost of Long Term Disability Insurance
In addition to age, health, and occupation, several factors affect long-term disability benefits, including:
- Coverage: The higher your benefits, the higher your premiums. Long-term invalidity benefits are tax-free. As a general rule of thumb, set the coverage to 60% of your pre-tax salary.
- Benefit period: The longer you want long-term disability benefits, the more your insurance will cost. Since most long-term disabilities last for several years, a benefit period of at least five years can be a good choice.
- Waiting time: The shorter the waiting time, the more expensive your long-term disability insurance will be. A short-term disability policy can make it possible to choose a longer waiting period so that you can save money on your long-term disability premiums.
Consult our friendly, knowledgeable agent about your long-term insurance options.