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Why Purchase LTD Insurance

About one in every five people will become disabled, which is one of the many reasons why purchasing long term disability insurance makes sense. Read on for a few other reasons why you should have LTD insurance coverage.

  • The average disability-related absence from work is 2.5 years. If you had to live without your income for almost three years, would you be able to survive? Could your family enjoy the standard of living it does now? The fact is, without coverage, one illness or injury could devastate your financial well being. When you compare the importance of LTD insurance with the affordable rates you pay for coverage, you'll see that an LTD policy is well-worth its cost.
  • Incentives and support in returning to work. Most companies offer support services to help policyholders who become disabled return to work. This might involve career counseling, vocational rehabilitation, job placement, and other services. Check with your insurer to see if these kinds of services are included in the costs.
  • Assistance with filing Social Security claims. If you're eligible to receive long term disability benefits, there's a good chance you may also be able to qualify for Social Security benefits. With some LTD policies, your insurer will help you determine if you're qualified and, if so, help you initiate the claims process.
  • To help pay for living, education, and medical expenses. Once you become disabled, your living expenses may increase, and your medical expenses will almost certainly increase. You might also face education expenses as you try to retrain for a different profession. For slightly higher premiums, you can increase your coverage amount to pay for these expenses if you become disabled.
  • To cover partial earnings losses. In the event that you become disabled but do not have to stop working entirely, you may be able to access a residual benefit on your plan. Basically, residual pays partial benefits if you experience a decrease in income due to a disability (e.g., you can only work part time). This is usually offered as an LTD policy rider, which will slightly increase your costs.
  • Tax-free benefits. If you pay your premiums with after-tax dollars, you can receive long term disability benefits tax-free. However, if your employer pays for your LTD insurance with pre-tax dollars, your disability benefits will be subject to taxation.
Examine the reasons why you may want to purchase insurance