Long Term Disability: Are You Covered?

You know how to kill a conversation at cocktail party? Start talking long-term disability Insurance. It’s not exciting. In fact it’s a buzz kill. But it’s a way bigger buzz kill if you need it and don’t have it. And the chances of you or your spouse needing it, are, unfortunately much higher than you’d think. Life insurance seems to get a lot of attention (as it should) but long-term disability also falls into the “necessary” category. Here’s why:

  • You are 12x more likely to become disabled than you are to die (after the age of 30).

  • 60-70 is the percentage of your income that you should have in long-term disability insurance coverage.

    source: daveramsey.com

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What exactly is Long-Term Disability Insurance?

  • LTD will help replace lost income in the event you or your spouse become disabled and cannot work for an extended period of time due to an illness, accident or injury.

  • This should not be confused with Long-Term Care insurance. These are very different products with very different purposes.

The insurance world can be very overwhelming. There are SO many products and even more opinions on them. Here is the good news. Long-term disability insurance is cheap. Many employers offer it through their benefits program. You may need to pay a little more each month to increase your coverage to 60%. You might not. Check your benefits. If you are self-employed, you can buy it on the open market. It may cost a bit more that way. Either way, its still very much needed. I know it’s not a fun thing for the to-do list, but you’ll feel better knowing you, your spouse and your little ones will be taken care of should something happen. Get ‘er dun.


FinanceKim HoggattComment