Thousands of people who are unable to work due to illness or accident file new disability claims every year. Many of these people are unprepared for the financial hardships that come with being incapacitated for more than a few months. Furthermore, some people will not only be unable to access employer-provided coverage, but will also be unable to meet the requirements for Social Security Disability Insurance. Understanding why you need long-term disability insurance and how it will protect you should the need arise will help you comprehend why you need one.
Long-term disability insurance, unlike health and life insurance, is frequently underestimated. This is due to the erroneous belief that most people’s chances of being disabled are low. According to a research conducted by the National Association of Insurance Commissioners in 2010, a 35-year-old man has a 20% chance of becoming incapacitated for 90 days or more. The danger is ten percent higher for women.
Employees in their 50s and older are the most likely to file a claim, but the number of persons in their 30s and 40s filing claims has climbed in recent years. The most prevalent disease-related disability claims, according to a survey by the Council on Disability Awareness, are those involving the musculoskeletal system and connective tissue, which can arise at any age. These medical issues were responsible for 30% of all disability claims. The second most commonly reported ailment was cancer. Accidents, such as car accidents, are often the source of many claims.
If you want to rely on SSDI, you might be startled to discover that the application process can be lengthy and that you must have been disabled for at least five months and expect to remain disabled for at least a year. SSDI, in addition to having notoriously strict claim requirements, rarely pays out more than half of your salary if you are eligible for long-term payments. Those who live in a state where employers are required to provide group long-term disability insurance may be eligible for up to 52 weeks of benefits. To obtain group long-term disability benefits, you must be employed by a mid- or large-sized firm in most circumstances.
The good news is that private disability insurance is meant to help you cope financially if you become disabled for an extended period of time. Disability insurance, like life insurance, requires you to go through an underwriting procedure that determines your risk level based on your work, medical history, and lifestyle. Individuals who practice health-conscious conduct frequently have the lowest insurance premiums. Depending on the extent of your impairment and the insurance coverage you selected, benefits can range from 50 to 70 percent of your earned income over several years.
Many people ignore the need of disability insurance when contemplating their insurance needs. The chance of becoming temporarily or permanently incapacitated, on the other hand, is substantially larger than the risk of dying and needing life insurance. You can make an informed decision about your needs and select the perfect plan for your individual scenario now that you know the facts about disability insurance.