| If you and your loved ones depend on your salary | | | | benefits would begin six months from the time of |
| for support, then you probably need long term | | | | disability. |
| disability income insurance. | | | | The waiting period is often called the elimination |
| Think about it: if you were to become disabled, even | | | | period. Choices usually range from 30 days to 720 |
| for a few months, how would you and your family | | | | days. |
| manage? Who would pay your bills? Disabling illness or | | | | Look for a waiver of premium provision. This means |
| injury is one of the leading causes of bankruptcy in | | | | if you become disabled, you will not have to keep |
| the United States. | | | | paying 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 | | | | insurance company has the right to cancel it. |
| life 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 |
| forgotten risk.' According to statistics from the | | | | time, sometimes for only two years. Other policies |
| Journal of the American Society of Chartered Life | | | | last a lifetime. The most popular policies pay benefits |
| Underwriters, if you are age thirty to fifty-five, your | | | | until you reach retirement age, when you can begin |
| chances of becoming disabled are two to three times | | | | to collect 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 |
| months or longer before you retire. One in seven | | | | a while, it may take you time to build your business |
| workers will become disabled for more than five | | | | back to the level it was before you became disabled. |
| years before he or she reaches age 65. | | | | Your 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 | | | | benefit. A recurrent disability is one that happens |
| the people who apply for Social Security disability | | | | after you recover from your original disability. Your |
| benefits are rejected. Social Security does not pay | | | | insurance should waive a new waiting period and/or |
| benefits for partial or short-term disability. Your | | | | not require proof that the two disabilities were |
| disability has to either last a year or be expected to | | | | related. |
| last a year before you can collect Social Security. | | | | When you buy disability insurance, you buy it |
| Worker's Compensation pays only if you were injured | | | | according to your income level. The more money you |
| on the job and benefits are often limited to a few | | | | make, the larger the benefit of your policy. But you |
| years. | | | | also have to figure that your income will rise as you |
| Your health insurance will cover your hospital, doctor | | | | get older. For this reason you want a future increase |
| and other medical bills, but you will still not have a | | | | rider or automatic increase rider. These riders allow |
| salary. Long-term care insurance only covers bills from | | | | you to keep your policy but increase the amount of |
| nursing homes or assisted care center. Disability | | | | your benefits based on your increased earnings as |
| insurance, however, does not pay bills. Instead the | | | | you 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 | | | | affect your price. You will pay less for the insurance |
| you and your family will not experience financial | | | | if you decide to replace 50% of your income instead |
| hardship during any period when you are too sick or | | | | of 80%. You also pay less if you opt for a longer |
| injured to 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. | | | | disability insurance because they make more claims |
| Best, 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 |
| period before you start receiving benefits. For | | | | and to ask questions until you completely understand |
| example, your policy may have a six-month waiting | | | | the details of the policy quotes being presented. |
| period before benefits are paid. In this case, your | | | | |