Being long-term disabled is a fear for many people. You work hard to put money on the table, and then your livelihood is taken away from you. Long-term disability can be a vital financial safety net that gives you protection from a wide range of unforeseen circumstances.
Paying a large percentage of your income for a long time can cover you against accidents, illnesses, and injuries. However, understanding long-term disability insurance is essential for getting the coverage you need. Read on for everything you need to know.

Defining Long-Term Disability Insurance

Simply put, long-term disability insurance is a type of coverage that replaces a portion of your income should you no longer be able to work. It acts as an income replacement and helps you to pay your bills until you get back to work, retire, or the policy expires.
Unlike short-term disability insurance, which generally only covers you for up to six months, long-term insurance usually lasts for many years. The exact time will depend on your policy, but it lasts much longer than short-term disability insurance.
Short-term disability plans are usually organized through your employer. Long-term disability plans can be offered through an employer, but you can also get a separate policy to protect you from financial harm.

How Does Long-Term Disability Insurance Work?

Long-term disability insurance works much in the same way as many other policies, such as life insurance. You pay a regular premium to the insurance company, and they’ll pay out should you meet the criteria set out in the policy.
It’s important to understand that the specifics of the coverage can change significantly from one provider to the next. This includes the money benefit amount, qualifying disabilities, and the duration of the payments.
The policy usually covers a wide range of disabilities, both work and non-work-related. As long as it stops you from performing your duties at your job, you are usually covered. This applies to whether the disability has been caused by an accident, illness, or chronic condition.
Examples of what is usually covered are musculoskeletal disorders, neurological disorders, cancer, and mental health conditions. However, the list will be much bigger than this. It’s important to examine the policy so that you’re covered for everything you need to be.

Benefits of Long-Term Disability Insurance

Some households are more vulnerable to a loss of income than others. For example, if you’re not the main income earner or have significant savings then it would be less of an issue. If long-term disability would be beneficial to you, here are all the advantages it can offer.
Income Replacement – This type of insurance will give you a source of income while you are able to work. This helps to provide critical cover for your expenses such as mortgage or rental payments, along with utility bills and groceries.
Financial Security – Losing an income usually comes with huge fears. Disability insurance will give you financial security and allow you to maintain your standard of living. It helps prevent you from dipping into your savings or retirement plan.
Peace of Mind – Just having this insurance is going to give you peace of mind. You can work with confidence knowing that if the worst happens, you’ll be protected. And if something does happen, you can focus on your recovery or treatment without financial stress.

Understanding Policy Features

Before you sign up to long-term disability insurance, it’s vital to look into its key policy features. If you’re unsure, it’s a great idea to use an insurance broker who can answer any questions you have. Let’s check out what you should be looking at.
Benefit Amount – This is the percentage of your income that the insurance will pay you every month. This typically ranges from 50% to 70% but could be more or less. The percentage of benefit amount can have a significant impact on the cost.
Elimination Period – A better name for this would be the waiting period. It’s the amount of time that must pass between the date of your disability and the beginning of the insurance benefits. This could be as little as 30 days but can be much longer.
Duration of Benefits – As you may have guessed, this is how long your benefits will last. This is usually at least two years but can be much longer. Exactly how long you need can depend on a few factors, including your age.
Definition of Disability – You should check the insurer’s definition of a disability. Some may decide it’s being unable to perform your current job, whereas others will define it as not being able to perform any job given your education or experience.

Considerations Before Purchasing

Due to the above, you need to assess your financial needs before selecting a policy. This includes living costs and debt obligations to understand how to maintain your financial stability. You should also double-check with your employer to see what benefits or policies they provide.
Knowing the exclusions and limitations is vital to getting the coverage you need. Check for any pre-condition clauses and occupations that may be excluded. You don’t want to sign up for a policy that is not suited to your health or job.
Finally, consider the coverage’s affordability and make sure it fits into your budget. While cost is important, it’s also crucial to remember that sometimes it’s worth spending that little extra to get exactly what you need.

Final Thoughts

Long-term disability can play a vital role in protecting you and your family should the worst happen. It will allow you to continue your quality of life and meet all of your expenses. While that’s true, you also need to know exactly what you’re signing up to.
Using an insurance broker or insurance agent can help you understand policy limits and exclusions to ensure they meet your needs. If you are looking for long-term disability coverage, then contact Marathon Insurance today. We’ll be happy to look at your circumstances and find the best policy for you.