Does everyone here have a plan for the worst case?

[yellow heel]

Its great alot of people here have great LTD insurance. My state disability insurance only covers 52wks@55%. I'm not sure what will happen after 52wks... This is the only disability insurance that I have. Maybe I should start looking for more coverage.

Anyone got any good suggests on getting a good long term disability? Where can I shop around for the best price? What to look for etc.

[irmanator]

My back up plan is pretty lax I guess, I am low income and used to being without a lot. I have 3 kids and hubby. Hubby and I both work. We could live on one of the checks if we had to, considering I use his for savings and grocery. I have a garden and can veggies. My kids are at the age where if needed they could get a job. (16,18, 21) My oldest is in college, next one is a senior. I wouldn't want them to do that but they are of the type to do that if they felt i needed the help. My oldest when she was still living in my house (1st yr coll. ) would push me out of the way at cash register on occaision and pay for groc. She felt that she was old enough to pay her own way.

[maat55]

I pay 27.95 per month for a disability plan.

[disneysteve]

I pay 27.95 per month for a disability plan.

That isn't really a meaningful number without knowing what that covers. Is that for $1,000/month or $10,000/month? What's the waiting period? Is that for lifetime payments or only until age 65? Are the benefits indexed for inflation? Lots of variables to account for.

[jpg7n16]

I have a LTC policy which has unlimited time frame for benefits.

DH has short term and long term disability ins and he has enough sick days/vacation days to meet the 90 day wait period for the short term disability ins which is a bridge to the 6 month wait period for the long term disability ins to kick in. He has a LTC policy which would pay for 5 years of benefits.

I would just like to clarify for any readers of the thread that missed this, or didn't understand it.

Long Term Disability is a different type of policy than Long Term Care (LTC) that Like2Plan mentioned.

Disabilty covers loss of income due to injury or sickness. (Think of the Aflac commercials) If you are too injured or too sick to work, the disability will pay you a percentage of your monthly wages to help meet your other bills. So if you get injured in a car accident or get cancer and are too sick to work, disability will provide you an income. They don't cover rehab costs.

Long term care (LTC) doesn't replace income. It covers expenses of caring for people who are unable to perform 2+ certain activities of daily living, usually for at least 90 days. (bating, eating, dressing, moving from a bed to a chair, toileting, or continence) And although it's usually compared to old age, age isn't actually a factor. If you are severely injured at 22 to the point that you can no longer bathe or use the restroom by yourself - and haven't been able to for 90 days, and aren't expected to be able to for at least 90 days, you'd qualify. (180 days is a long time. Hence the name long term care)


I just wanted to cover this to let anyone reading know that you should evaluate whether you need both. Not just one or the other.


The typical arrangement is that young people need long term disability, and.... not as young people need long term care. But each situation is different.

If you're going to retire next month, you don't need a disability policy - cause you don't need to replace your income. You're retired!

And if your family has a history of early onset Alzheimer's, you may need to get a LTC policy before it hits you (which it hopefully never will)

[Robert742]

@ yellow heel: I would search on the Internet for independent agents licensed in your state that specialize in long-term disability. Long term disability insurance is not like shopping your auto insurance. Benefits and policy provisions vary a lot between companies, and it can be hard to qualify depending on your occupation. An experienced agent that knows the disability market and represents multiple insurance companies will be your best source of information.

First, do your own research about long term disability coverage. Double check with your employer/union/trade association to confirm no group long term disability insurance is available to you. If you are permanently disabled, you should qualify for Social Security disability, but claims are frequently denied, and it sometimes can take years to be approved -- and the benefits may not be enough to support your standard of living.

Then, talk to more than a few agents. Ask them how often they sell long term disability insurance. If any of them do not sell it often, move on to the next agent. If you are not a white collar worker, look for agents that represent insurance companies offering disability to blue collar professions. Be sure to tell them about the short term disability coverage you have now.

I sold auto and home insurance for many years, and I like to help people make better insurance decisions. I am familiar with the basics of disability insurance, but I don't know the market, and I am far from an expert. One thing I know -- it is always best to shop with more than one agent, and not rely on any one opinion.

Are there any life/health/disability agents wanting to chime in about this topic?

[DebbieL]

My long-term disability costs about $200 per year. It is offered by my professional association and is a good policy that covers 75% of my gross income (for life). I could live on it quite easily. (My profession does not have a high disability rate, I suppose).

Since short-term disability is a mandatory state program here, I have a 1-year waiting period (which does make it cheaper). Short term disability is very good here (utilized it for 2 pregnancies). Short-term cost about $1k per year, but I have no choice on that, working in California. (I took $30k benefits with 2 normal pregnancies/leaves - so has been worth the cost, to me). Short-term lasts up to a year.

Plan C is we don't rely on my spouse's income, so he could always work if I were to become disabled (is not working at current).

That is an incredible rate for disability insurance. Even when I looked into disability insurance about 10 years ago (and I was only making about $30k at the time - so the insurance would have only gone to about 70% of that since they won't cover you for more than that). So, I think for a policy that would have given me about $1700/month (with a COL rider) would have been something like $75/month.

I don't currently have disability insurance, and it bothers me. I think that I won't be able to get it now because I have a sister that died of cancer, and it turns out I have a BRCA1 mutation (high breast/ovarian cancer risk). Even though I've taken surgical steps to prevent it, I'm not sure how insurance companies might discriminate against me. Well, I'm thinking that if they did insure me, the rates would be through the roof. My only hope is if I worked for a large company that provided it to their employees.

[Joan.of.the.Arch]

Glad someone brought up that disability insurance is not the same as long term care insurance. It is the long term care insurance that I found so expensive. And having a working spouse whose income you both can live on in healthy, normal times is not necessarily coverage for needing care in times of a disability. While your partner is at work, who is going to do that in-home nursing care you need?

Seven years ago my next door neighbor paid $100 per eight hours for an unskilled but bonded, experienced helper through an agency. Actually I should say her daughter paid it! That did not buy any real nursing skills, permanent or disposible equipment, or special comfort items.

[MonkeyMama]

This thread reminds me that I have always been annoyed that my spouse is ineligible for disability insurance because he does not work. I have not come across any policies that cover people who do not work. But my spouse's not working should only be temporary. (A 10 year break or so to raise kids). It annoys me because it would hurt us financially if he could no longer work. A LOT.

I am sure a lot of people unwillingly unemployed at current feel the same way. (This is how my spouse started his decade of unemployment - laid off and unable to find work the times that he has tried).

[asmom]

My job provides me funds with which I purchase LT and ST Disability insurance. It costs something like $35/pay period. It only replaces 60% of my income.

The best defense for a situation like that is to keep our debts very, very low. If you're married, keep your expenses low enough that you can live on one person's salary.

This really is an excellent topic because when I was a research nurse, the group I worked with(rheumatological diseases) were low-income people almost all of whom had been working when they became ill and who were now destitute. However due to the nature of their diseases, which always started off with vague symptoms they usually started off with a pattern of missed work due to illness which their doctors were unable to pinpoint an accurate cause for right away. By the time, they were diagnosed and referred to rheumatology they had lost their jobs because of excess absenteeism. They ran through their meager savings waiting on the disease to stabilize or for treatments to work. In several cases, I knew of people who were no longer able to work due to severe osteo- or rheumatoid arthritis and needed joint replacement surgeries but were unable to get them without health insurance. That meant they couldn't get fixed which means they couldn't go back to work.....well you get the picture. You can't get Medicaid unless you are disabled.

Despite the anger people have against people on SSDI, it is incredibly difficult to get benefits-up to 2 or 3 years' wait approval for some, I don't care how much objective evidence is available to prove that they cannot work in any capacity. By the time they start receiving their meager disability checks they are on food stamps barely hanging on and facing the disdain of a judgmental populace. It's crazy.

So to summarize:
1. Live below your means.
2. Purchase disability insurance if your job does not provide it.
3. Keep your fingers crossed.

[yellow heel]

So I checked with my employer and it appeals we do have LTD. It will kick in after 90 days of disability. The monthly benefit amount is 66 2/3% of base earnings (10k max). Best of all it was free. This is why I didn't know about it since I didn't see it the payroll deduction. It has a 3 year own occupation and after that is any occupation.

What do you guys think of these benefits?

[yellow heel]

Suppose so you really sick or disabled. You are going through all your sick/vacation/personal days. At this point you are still employed so you have medical insurance but what happens after you use up all your sick/vacation/personal days. Do you get fired? Then do you lose your medical insurance so how do pay your medical bills??

I don't think 66% or whatever percentage of benefit you get from LTD will be enough but will this be the really?? Are you screwed even if you have LTD?

I have never though these situations thorough but maybe its a good idea while I am doing the research.

[DebbieL]

I always thought that the 65%-70% was meant to represent what your usual after-tax income would have been. If you purchase your own policy (at least here in Canada) the benefits are not taxable. However, our income tax rates tend to be much higher than in the US, so maybe that's not the reason behind the 65%. I know they say in retirement you should plan on needing 65-70% of what your pre-retirement income was to maintain the same lifestyle. I guess they figure you won't need to buy nice clothes and drive as much if you are no longer working. To be honest, the 65-70% being the maximum you could insure your income for with LTD did bother me, because at the time I was looking into it years ago I needed much more than that (my income was lower). My tax bracket wouldn't have come anywhere close to taking that big of a chunk of my income.

[disneysteve]

I always thought that the 65%-70% was meant to represent what your usual after-tax income would have been. If you purchase your own policy (at least here in Canada) the benefits are not taxable.

I believe the same is true in the US. If you own the policy, the proceeds are tax-free. If, however, your employer provides the policy, then the proceeds are taxable.

[jpg7n16]

The reason for the 65% is...

They won't give you 100% of your income, cause you'd have no incentive to get healthy.

And yup, if you pay for the policy, proceeds are tax free. If employer pays for the policy, proceeds are taxable.