Long Term Disability Insurance
Long Term Disability: Coverage Lasting to Age 65
Long term disability insurance is becoming more important as medical advances have turned deaths into manageable conditions - some very lengthy. A long term absence from work can wipe out years of savings.
Long term disability insurance is also vital to those in high-end occupations requiring fine motor skills. A loss or diminishment of fine motor skills can prevent someone from performing job duties it took years to perfect. What you will find on this page:
Long term income replacement is not the first option a women should consider if planning a pregnancy. Most long term policies come with lengthy elimination periods - normal delivery will never be covered. Consider a short term policy designed for this purpose.
Long Term Disability Insurance Coverage
Long term disability insurance coverage benefits can be broken down into five categories:
Payment amounts are expressed in by the percentage of income replacement; typically 50% to 60%. There may also be a hard dollar cap which may reduce the actual percentage of income replaced. Also look carefully at how the policy language defines income. Policies may treat salary, commission, and bonus payments differently. Often variable pay is not included.
The benefit period is the length of time that benefit will be paid. Typical benefit periods are 5 years, 10 years, or to age 65.
There are several key provisions to look for in a long term policy. An "own occupation" definition provides a higher level of protection for those in skilled occupations than does an "any occupation" definition. Guaranteed renewable means that the policyholder can't be dropped from coverage if his health deteriorates. Non-cancellable means the premiums will never change.
Riders might include a cost of living adjustment, and a residual benefits rider provides additional protection in the event that the policyholder gets a new job with a higher salary.
Elimination period refers to the length of time you must be unable to perform the duties of your full time occupation before benefits begin to be paid. The shorter the elimination period, the higher the premium. Typical elimination periods are three to six months.
If you don't have three to six months of savings short term disability insurance may be a better fit. It offers shorter elimination periods and the premiums are made more affordable by limiting the benefit period.
Long Term Disability Insurance Claims
Knowing the long term disability insurance claims process becomes critically important should you be unable to work due to a covered sickness or accident. There are several steps one should take to ensure that your claim is handled promptly. Remember that the insurance carrier will ask for complete documentation because they will be audited.
Know your policy. If you believe that you have a claim the first thing to do is read through your policy carefully. Become familiar with the terms of your contract in order to understand what the carrier needs to pay your claim.
Get organized. Keep records of everything relating to your claim and keep them in a safe place.
Document your communications. Keep detailed notes of every conversation with the insurance carrier: include dates, names, and case numbers.
Long Term Disability Insurance Attorney
A long term disability insurance attorney may be needed should your claim fall into a gray area. Policies can be complex contracts. It may become necessary to hire an experienced attorney to present your case to the insurance carrier. Look for an attorney with experience handling disputed claims.