| If you and your loved ones depend on your salary for | | | | period before benefits are paid. In this case, your |
| support, then you probably need long term disability | | | | benefits would begin six months from the time of |
| income insurance. | | | | disability. |
| Think about it: if you were to become disabled, even | | | | The waiting period is often called the elimination period. |
| for a few months, how would you and your family | | | | Choices usually range from 30 days to 720 days. |
| manage? Who would pay your bills? Disabling illness or | | | | Look for a waiver of premium provision. This means if |
| injury is one of the leading causes of bankruptcy in the | | | | you become disabled, you will not have to keep paying |
| United States. | | | | for your disability policy. |
| Most people do not realize that their chances of | | | | What are the conditions for renewing the policy? If |
| becoming disabled are greater than their chances of | | | | you're policy is not automatically renewable, the |
| dying prematurely. Yet they are more likely to buy life | | | | insurance company has the right to cancel it. |
| insurance than disability insurance. For this reason, | | | | Payment period options are another consideration. |
| people in the insurance industry call disability "the | | | | Some policies will only pay for a certain period of time, |
| forgotten risk.' According to statistics from the Journal | | | | sometimes for only two years. Other policies last a |
| of the American Society of Chartered Life | | | | lifetime. The most popular policies pay benefits until you |
| Underwriters, if you are age thirty to fifty-five, your | | | | reach retirement age, when you can begin to collect |
| chances of becoming disabled are two to three times | | | | Social Security payments. |
| greater than your chances of dying. | | | | Most policies have a residual disability clause. If you |
| If you are thirty-five years old, you have a 50:50 | | | | suffer a disability, very often you will return to work |
| chance of experiencing a disability lasting last three | | | | part-time at first. Or because you were off work for a |
| months or longer before you retire. One in seven | | | | while, it may take you time to build your business back |
| workers will become disabled for more than five years | | | | to the level it was before you became disabled. Your |
| before he or she reaches age 65. | | | | insurance should provide income for both these |
| Many people mistakenly believe that the government | | | | scenarios. |
| or Worker's Compensation will pay them an income if | | | | Check over the policy for a recurrent disabilities |
| they become disabled. Actually, more than 80% of the | | | | benefit. A recurrent disability is one that happens after |
| people who apply for Social Security disability benefits | | | | you recover from your original disability. Your insurance |
| are rejected. Social Security does not pay benefits for | | | | should waive a new waiting period and/or not require |
| partial or short-term disability. Your disability has to | | | | proof that the two disabilities were related. |
| either last a year or be expected to last a year before | | | | When you buy disability insurance, you buy it according |
| you can collect Social Security. Worker's | | | | to your income level. The more money you make, the |
| Compensation pays only if you were injured on the job | | | | larger the benefit of your policy. But you also have to |
| and benefits are often limited to a few years. | | | | figure that your income will rise as you get older. For |
| Your health insurance will cover your hospital, doctor | | | | this reason you want a future increase rider or |
| and other medical bills, but you will still not have a | | | | automatic increase rider. These riders allow you to |
| salary. Long-term care insurance only covers bills from | | | | keep your policy but increase the amount of your |
| nursing homes or assisted care center. Disability | | | | benefits based on your increased earnings as you |
| insurance, however, does not pay bills. Instead the | | | | grow older. |
| insurance company gives you money on a regular | | | | When you buy your insurance, certain factors will |
| basis. It is designed to replace your salary so that you | | | | affect your price. You will pay less for the insurance if |
| and your family will not experience financial hardship | | | | you decide to replace 50% of your income instead of |
| during any period when you are too sick or injured to | | | | 80%. You also pay less if you opt for a longer |
| work. | | | | elimination period. The insurance company factors in |
| What should you look for when you are buying long | | | | your current health and may exclude preexisting |
| term disability insurance? First, the insurance company | | | | conditions. Women and smokers may pay more for |
| itself should have a top rating from Moody's, A.M. Best, | | | | disability insurance because they make more claims |
| and Standard and Poor. These agencies rate | | | | than non-smoking males. If you are in a high-risk job, |
| companies in terms of capitalization, growth, earnings | | | | your policy may cost you more. |
| and other indicators of financial stability. | | | | Disability insurance policies can be confusing. It is |
| Secondly, you should make sure you understand the | | | | always best to sit down with a professional insurance |
| terms of your policy. Some policies require a waiting | | | | agent to discuss the terms of the policy together and |
| period before you start receiving benefits. For | | | | to ask questions until you completely understand the |
| example, your policy may have a six-month waiting | | | | details of the policy quotes being presented. |