There Are Two Types Of Long Term Disability Insurance

Category: Finance.

Long term disability insurance can be vitally important to those people who want to protect themselves against the loss of future earnings.

The benefits received from disability insurance can help pay mortgage bills, medical expenses, living expenses, etc. Disability insurance, is used when, in general a person is no longer able to work and to earn a living. In many ways, it can be the difference between maintaining a lifestyle and facing a lifetime of uncertainty. There are those policies that are considered" group" policies. There are two types of long term disability insurance. These are usually bought through the workplace or through participation in certain organizations.

Private long term disability insurance is purchased by the individual and is usually more expensive than policies purchased through group policies. The other type is" private" . There are also those group policies that allow participants to add more coverage to an individual policy as long as the person is willing to make the added payment himself. In the area of private long term disability insurance the first thing to understand is that this type of insurance can be expensive. For those who have group coverage this can be a good way to get added protection at discounted prices. It is almost certainly going to be more expensive than life insurance. Its main value is that it allows you to maintain a close semblance of your lifestyle should you be forced out of work due to illness or injury.

However, this type of protection is actually more valuable than life insurance in many ways. There are some advantages to having private long term disability insurance as well. Another benefit to having private coverage is that the coverage is not bound to your job. The benefits that you receive if you become disabled will be tax- free, as long as you paid the insurance premiums with after- tax money. In other words, if you change jobs your coverage does not end as would be the case with most group coverage policies. Most group policies use what is known as the" any- occupation" scheme which allows for the less expensive premiums, but also provides a lower amount of benefits.

If your occupation allows for exceptionally high earnings you may need to purchase a special type of private long term disability insurance that will lock in that level of earning should you become disabled. High earners need to take this into consideration when thinking of long term disability insurance. This guarantees that premiums will not be changed as long as you pay them on time and in full. There are some important things to look for in private disability insurance: You want a policy that is" non- cancellable" . You also want to look for a policy that is to age 6 You want to avoid policies that are termed as" accident only" . There are a number of riders that can be bought with most private long term disability insurance and you should go through those carefully as some of them can be very important.

These polices will not pay if you become disabled through illness rather than injury, and some of the accident conditions can be hard to meet. Most riders will cost a bit more to implement into the policy but they can be worthwhile should you ever need to use them.

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