Tips for Buying LTD Insurance

Purchasing long term disability insurance isn't quite as simple as buying home or car insurance. For guidance on how to buy a long term disability policy, read the following tips. We'll tell you how to find the lowest long term disability rates without sacrificing quality.

1. Check into employer-sponsored coverage. The lowest long term disability rates will apply to policies subsidized by your employer. Before you purchase an individual long term disability insurance policy, verify that your employer does not offer this coverage. Group LTD insurance is always much cheaper than individual coverage.
2. Investigate other group LTD insurance coverage. Even if your employer does not offer long term disability insurance, you might still be able to qualify for group coverage through an organization to which you belong. For example, AARP offers discounted long term disability rates to its members.
3. Compare the LTD rates of at least three insurance carriers. Get at least three quotes on long term disability premiums from various insurers. Compare the offers on their rates, how they define disability, and whether the coverage is guaranteed renewable or noncancelable.
4. Don't count on Social Security disability benefits. When deciding how much long term disability coverage to buy, it's best if you don't account for the potential Social Security disability benefits you might receive. These benefits have very strict definitions of disability and are only available to eligible workers for a certain period of time. The waiting period for Social Security disability benefits is also at least five months.
5. Buy long term disability while you're young. Long term disability rates will go up as you get older, which is why you should buy coverage while you're young and healthy. As you age, you might also develop health conditions that will preclude you from qualifying for long term disability insurance, so buy LTD coverage as soon as you can.
6. Lengthen your waiting period. The waiting period of an LTD policy refers to how long a policyholder must wait before benefits are paid out after the insured becomes disabled. Longer waiting periods will lower your long term disability premiums. Before you lengthen your waiting period, make sure that you have enough savings or sick pay from your employer to get by during the interim. If you are trying to minimize the costs of your policy, choose to lengthen your waiting period rather than abbreviate the period of time in which you receive benefits.
7. Select an insurer with strong financials. Affordable long term disability rates are not the only criterion you should consider when selecting an LTD insurer. You should also select an insurer that is financially strong. To determine the financial health of an insurance company, refer to an independent agency like Moody's or Standard and Poor's for more information.