In yesterday’s post I discussed the need for long-term disability policies. Life insurance policies are relatively easy to comprehend. My husband and I purchased term insurance for 20 years, believing that our homes will be paid off by that time. Most people don’t need extra riders on a life insurance policy, the payout is simple, you die and your beneficiary gets paid. But disability insurance policies can be quite confusing. After all, unlike death, disability isn’t so cut and dry. Some policies will pay you if you cannot work at your current profession, others will only pay you if you cannot work in any profession.
I spent a long time reviewing various policies and riders and documented those details in this post back in May of 2006.
3 thoughts on “Choosing the Right Disability Insurance Coverage”
Yeah, I got a disability policy on top of the one I have work last year, and it was one of the more confusing things I’ve had to deal with. Mostly the riders. Of course I wish I gotten the policy when I was younger before I developed a pinched nerve in my back. The insurance companies never cover preexisting conditions. My condition is not serious and no big deal, but the policy is written in way that excludes basically spinal issues. Insurance companies know how to cover their ass.
Long term disability insurance is an absolute necessity, you are correct. Many people, however, overlook the need for short term coverage, to bridge the gap (often 90 days) before long term benefits kick in. Sad to say, but precious few people have sufficient savings or emergency funds to lead them through three months of expenses!
There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD). The Short-Term Disability policies (STD) have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years. The Long-Term Disability policies (LTD) have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life. Disability insurance pays an insured person an income when that person is unable to work because of an accident or illness. I hope these information are enough dong 🙂