With the advances in healthcare and living conditions, more Americans are living longer, healthier and exciting lives. These new lifestyles create additional needs related to how to care for themselves as they live longer and lead more active lives at advanced ages.

In the past, the most men and women had to worry about was buying enough life insurance to leave to their families when they died. This concern was important because the average life expectancy of most people was not that long. As recent as one-hundred years ago, the average life expectancy of a typical American male was forty six years. Life insurance was needed to protect family members, and help them with college, and other such expenses. Today the average wage earners lives almost to double that, and as such life insurance is not as important to now, as it was in the past. The average worker’s life expectancy is now at around seventy-seven years, long enough to make sure that family members are able to provide for themselves, thus the need for life insurance is a lot less now than it was then.

The main concern now is being able to afford living as long as we are. How to pay for the resulting expenses associated with living for longer periods of time. The advances in medical science and medical technology have made the concern of dying too soon, to how to make sure we can live with long term disability, which is today’s leading cause for concern among older people.

The answer to this concern is long term disability insurance. Long term disability insurance pays for a percentage of your salary or income in case you become disabled and unable to work due to an illness or injury. Every year, millions of American (about twelve percent of the under sixty-five population) become disabled and unable to work.

Depending on your age, you have about a one in three chance of suffering at least one long term disability. Such a disability is defined as one on which you are unable to work for a period of at least ninety (90) days. Many Americans assume that Social Security will pay them a disability benefit in case of such an illness or condition. Social Security does pay in such a case, however, the amount that Social Security pays is typically not high enough to adequately cover the needs of the average America.

To supplement these inadequate Social Security benefit amounts, Long Term Disability Insurance is necessary, and can become the answer to most of the problems faced by individuals and families when faced with such a situation. The cost of long term disability insurance is determined by age, and there are some factors to consider in order to find the best price and best coverage options to make sure that the long term disability insurance policy you buy actually provides the help that you need.

Some factors to consider and look out for include:

1. What is the definition of disability in the policy you are considering? Typically this relates to the wording in the policy as it pertains to “own occupation” or “any occupation.” Does it mean being able to work in the field you were working in before you became disabled? Or, does it mean any occupation? For example, if you are a medical surgeon, and are injured and cannot work as a surgeon, but you can still teach. The definition of the disability will determine your benefit amount.
2. Is it Guaranteed Renewable and Non-Cancelable? – Read these clauses carefully. Typically, employer sponsored plans do not contain any guarantees past the present year coverage. An individual plan, may be a safer answer for you.
3. How will you pay for this coverage: Tax deductible premium or tax free benefits? – This is important to know because it will affect how your benefits are taxed. If paid with pretax dollars, then your benefits will be taxed when you receive them. If your premium is paid with after-tax dollars, your benefits are not taxed when you receive them.
4. What is the Elimination Period? – This is the amount of time that you must be disabled before benefits kick in. This elimination period is usually ninety to one hundred and eighty days.
5. How will it treat Supplemental or Overlapping Coverage? – Some policies guarantee a fixed benefit amount reduced by any benefits you receive from social security or other government programs
6. Does it have a Premium Waiver option in case of partial disability? – this rider pays your premium for you in case of a partial disability. This is a good option to have in case you should be in danger of losing all of your benefits due to a partial disability that does not qualify you to otherwise receive benefits.

It is recommended that you buy this type of coverage on your own as an individual policy, at least in part, rather than only as part of an employer-sponsored plan in case you should lose your job, or decide to leave your job. Avoid overbuying, and concentrate on buying just enough to cover your mortgage and other fixed monthly expenses.

Tags: Disability, Disability insurance, Insurance policy, Life Insurance, long term disability insurance, Social Security

This entry was posted on Friday, April 16th, 2010 at 1:53 AM and is filed under Disability Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.