Long term disability insurance is a critical part of protecting cash flow for today’s workers. For those people who still work without income from a pension or social security, then long term disability is the financial protection that will keep the roof over your head if you are injured of fall ill outside of work.
A long term disability insurance plan is designed to pay a specific monthly income to those people who are injured or who become sick outside of work. Policies come in varying lengths that range from a year or may cover an individual until the legal retirement age. The goal of long term disability insurance is to help protect long term earnings. This is because income is replaced by policy payments in the event of a loss.
Long Term Disability Insurance-How Do I Know If I Need This Insurance?
There are a lot of different types of insurance coverages out there for people to wade through. To determine if you need disability insurance for the long term, then ask yourself the simple question. If I become injured or fall ill, where will the money come from to pay my bills? If you are like many people these days, the answer to that question is from nowhere. If you need your pay check to pay your bills then you need long term disability insurance.
People prepare for treatment of illness or injury though health insurance. Sadly, many people do not prepare for the financial burden the accompanies an injury or illness. Even sadder is the realization that when to compared to health insurance, disability insurance is really inexpensive.
Long Term Disability Insurance-Taxation:
In the past, many employers offered a disability insurance to workers as part of their benefit package. In today’s economy, many of those benefits are gone. Even if your employer still offers you a disability insurance package, the benefit if paid out is taxable. On the other hand, privately held disability insurance payouts are not taxable as income. In situations where payments are received long term, taxation could add to your financial burdens if, at the end of the year, you are suddenly liable for taxes on disability payouts.
Long Term Disability Insurance-Difference between Short and Long Term Policies:
To begin with long term and short term disability policies should go hand in hand. Short term disability insurance works with existing vacation that has been accrued. Short term disability insurance payments are not consistent either. They tend to reduce in payment amount as the claim ages. End payments can be as low as 60 percent of earnings. The life of a short term disability insurance case is usually six months. After that time period expires the long term insurance kicks in to effect. The most important difference between short term and long term insurance for disabilities is the period of time for one or the other to become active. Long term disability usually has a six month wait period or a clause that begins when a short term policy expires. Both long term and short term disability insurance policies are important for the financial protection of anyone who is injured or who may be come ill.
Long term disability insurance pays a consistent amount until the claim expires or the patient recovers enough to begin working again. This perhaps one of the most arguably important insurance policies that people can purchase. This is because the medical community has done such a wonderful job in advancing treatment for many diseases that used to be fatal. The downside to the advancement in medicine is that the recovery time for many illnesses or diseases is quite a bit longer. This means that those people who are afflicted but cured of a disease or illness will likely take a very long time to recover.
Long term or short term disability insurance policies are designed to help protect the financial security of people who are not ready or who may not quality for retirement payments, pensions or social security. Both types of policies should work in conjunction with other types of insurance such as health insurance to cover catastrophic situations that may occur. The cost of disability insurance is significantly lower than health insurance premiums and the benefit is well worth the cost if a claim should need to be filed.
Here Are Some Other Insurance Related Links I found For you To Browse Thanks For Stopping By Insurance HQ
Short Term Disability Insurance
Short Term Disability Insurance
Usatoday.com Home insurance rates likely to go higher
Answers.yahoo.com Topic Insurance
Insurance Rates Driven Up
Health Insurance Rates Too High
Time to reassess your valuables