Long term disability insurance--Who has it?

bmo88 · September 2015

So DH and I finally got life insurance a few months ago. Now, we are considering getting long term disability insurance since at a young age, you are more likely to become disabled than die after an accident (morbid thought I know).

Who here has it? What company did you get it from? What percent of your income would it replace? Did you get a good rate?

MommyLiberty5013 · September 2015

Husband has it via his job. I do not.

But, here's just an honest question on the topic for anybody for the sake of discussion...

With the level of technology now with prosthetics and even mobility tools (scooters, chairs, etc.) as well as advances in PT and OT, what would be some instances in which you couldn't go back to work and were totally prohibited from having any source of income thus needing to rely upon long-term disability?

I recognize that if you become disabled, you may not be able to return to your same field of work that one was in prior to an accident, but there are lot of jobs people who are disabled could do in place of their previous area of work.

Maybe I'm wrong and there are others, but the things I could think of that could totally prevent someone from returning to earn an income are chronic pain, vegetative state, or total paralysis.

vlagrl29 · September 2015

We have a short term disability policy on DH, not myself. I can't think of the company right off the top of my head right now but we pay $50 per month. It's a great piece of mind for us, knowing that if something happened where DH couldn't work we would have income for a year - really 2 years if we pinched pennies. It's a one time payout of $60k.

vlagrl29 · September 2015

I think too that if someone really became "disabled" as in for the rest of his/her life, one could get a disability income from the government. Not an expert here, but that was always my impression.

bmo88 · September 2015

So we both have long term disability through our employer, that is fairly common. But it only applies if an injury/disability is caused by something related to the job. We both work in admin, so that is unlikely. So employer disability doesn't really count in our case at least.

simplyelise · September 2015

Disability insurance provides income above what you could get from the government (which is not much, less than 1000/month it seems). And you don't have to be permanently disabled to claim long-term disability insurance. You can claim it for a couple years if that is what it takes for you to recover and get back to work. Short term disability insurance is typically only a few months of coverage and not usually as much of an income replacement.

DH and I both have policies through work. They are replacement at 2/3 salary with a 6 month wait before benefits start.

The disabilities you are really insuring against are a loss of mental facilities. (Unless you have a physical dependent job like a lineworker in which case you would want disability insurance until you can retrain for a different profession).

An acquaintance of mine in May went in to the ER with chest pain and difficulty breathing. Here we are 4 months later and they still don't know exactly what virus infected his heart and almost killed him multiple times. He was in a medical come for several weeks and only woke up a couple weeks ago without the ability to walk or talk much. Because of the various times he was deprived of oxygen, he has some brain damage. They don't yet know the full extent of the damage or how limiting it will be, but he likely won't ever be back to who he was before.

Traumatic brain injuries or degenerative diseases or paralyzing car accidents or 3 year long cancer battles are things that could completely keep you from working in any capacity for over a year. These are absolutely things to worry about as a young person and long term disability is absolutely something you should have if you are at all able to get it.

As for who to go to...I'd first check to see if you can purchase it through your employer. That would be the cheapest. I don't have any recs on companies specifically, but I imagine they'd all be pretty similar premium amounts because they base a lot of it on the riskiness of your job and lifestyle.

Here's a good, brief rundown on the need and options for LTD from Forbes: http

/www.forbes.com/sites/ashleaebeling/2013/09/24/5-myths-about-disability-insurance/

Xstatic3333 · September 2015

I agree with @simplyelise, I'd be most worried about the loss of mental capacity vs. physical. My good friend fought brain cancer right after college, and though he now is able to work in his field he really couldn't during the couple of years of treatment, so that concerns me too.

This is a good thing to think about, so thanks for bringing it up, OP! I am not offered this benefit through work and am also curious if it's possible to obtain independently. Though I know government disability benefits do exist, my understanding is that they are barely enough to get by on.

hoffse · September 2015

We don't have LTD policies, but we should probably get them. It's on my list for 2016.

We both have short-term through our employers for 6 months, and both employers offer 6 months of medical leave for either personal or family care. We don't need both incomes right now, so setting up LTD insurance has been a lower priority than getting other things squared away, since we have the short-term policies.

I've actually thought about trying to use the short-term policy to take an extended mat leave beyond the point when my paid benefits would expire, but I haven't looked into it yet.

LTD is definitely something we will have set up before having kids. At that time our expenses outside of childcare will go up - health insurance in particular - and if one of us became disabled we would probably need childcare to continue so the other could work. It could easily wind up being more expensive than regular job loss. At this point we would just barely have enough under one income to cover our expenses + health insurance increases + childcare in that scenario, and things like retirement would have to be put on ice if that happened. A long-term policy would give us some breathing room for those few years.

Like other things, at a certain point you become self-insured if you save right, and at that time the disability policies and life insurance can be dropped because you have enough to continue on even without those payouts.

KatieCutie05 · September 2015

we both have it through work but my employer pays for mine, DH has to pay for his. We didnt even debate it, he had to get it. long term replaces your income every year if you become injured and unable to work. Yes technically in a few years its possible that you could recover enough be able to perform a different job but until then you are living on nothing. It only covers half his salary but half is a whole lot better then nothing! plus it was really cheap but im sure it was cheaper going through his employer.

jessica490 · September 2015

My employer pays for mine and DH doesn't have coverage for that under my insurance.

brij2006 · September 2015

That's one of the things DR recommends to have, whether you're out of debt or not. So I say get it.

But my H has it, I do not. He has it through his employer, and it covers 80% of his pay for being laid up any longer than 8 weeks.

I do not have it since my employer does not provide it. We quoted it through Aflac, and it was expensive when we had to try and factor in my commissions and bonuses. But mostly, I do not carry it because my job is non-stressful and can be done from home or while laying in a bed. So we figure that the odds of me breaking my leg and being out my job and income, are slim.

His is high since he works with machines and on his feet for 12 hours a day. A simple sprained ankle, and he's not able to do his job.

blondie42107 · September 2015

H has LTD through his employer, I do not. Social Security Disability is based on how long you've been working and paying into Social Security. So if you are a state/government employee that doesn't pay into SS, it's definitely something to consider.

simplyelise · September 2015

blondie42107 said:

H has LTD through his employer, I do not. Social Security Disability is based on how long you've been working and paying into Social Security. So if you are a state/government employee that doesn't pay into SS, it's definitely something to consider.

Good point. My husband is a state employee and he does pay into SS, but I am in a SS exempt position. Thankfully my employer covers my LTD.

short+sassy · September 2015

I currently have STD and LTD through my employer. They are free benefits now, but I have always purchased both when those policies were available to add with other employers. I've never purchased these types of policies outside of a job, though.

LTD is typically pretty cheap to buy because most policies don't kick in until after 6 months from a disability occurring. The vast majority of disabling injuries/conditions will happen and be over within 6 months anyway...which falls under STD.

You just never know! I have a friend who went on disability from her job 15 years ago. She collects both SSI and LTD. Having LTD was a godsend for her. She scrapes by with just a little left over each month...and that is with both. I don't know what she would do if she only had the SSI.

orangehills · September 2015

It's on my to do list in the future, along with a will.. but at least we have life insurance. So, my father got cancer- he couldn't work a lot even though he was there mentally, but physically he just couldn't handle working. The long term disability insurance saved his and my mom's finances. When he passed away, his life insurance set my mom up for life. They are good things to have!

blondie42107 · September 2015

short+sassy said:
I currently have STD and LTD through my employer. They are free benefits now, but I have always purchased both when those policies were available to add with other employers. I've never purchased these types of policies outside of a job, though.
LTD is typically pretty cheap to buy because most policies don't kick in until after 6 months from a disability occurring. The vast majority of disabling injuries/conditions will happen and be over within 6 months anyway...which falls under STD.
You just never know! I have a friend who went on disability from her job 15 years ago. She collects both SSI and LTD. Having LTD was a godsend for her. She scrapes by with just a little left over each month...and that is with both. I don't know what she would do if she only had the SSI.

SSI and SSD are two different things. I'm assuming you meant SSD?

short+sassy · September 2015

@blondie42107, yes, I do mean SSD. I was just thinking Social Security, in general. Thanks for the correction. In fact, if I am not mistaken, I think when she turns 65 the SSD turns into the more typical SSI AND she loses her LTD all together. Because then she will be considered at retirement age.

She's in her late 50s and I know she is already stressing about what will happen when she loses the LTD.

Now I can't help but be snarky. Even though she is a friend, I don't have a lot of sympathy. While she does have medical problems, I strongly suspect she could have gone back to work a long time ago. She has even talked about, but doesn't want to give up her situation unless she can land in at least a $45K/year job...even though she has no higher education, no current experience, and no computer skills. I think that is her way of saying "she's trying", but making sure her goal is unachievable so she doesn't have to change anything. She even worked a heavy part-time job a few years ago during a campaign because she really liked the politician.

blondie42107 · September 2015

@short+sassy Yes, at age 65 SS disability turns into traditional SS retirement. SSI is supplemental security income which is a whole other story. If SS retirement income is low enough, people can qualify for SSI but it's still not much to live off of. Max is $733 for 2015 and its pretty much assumed the person would qualify for state aid programs for Medicaid insurance (on top of Medicare) and likely food assistance.

I understand the somewhat lack of sympathy. In my line of work I see people who truly can't return to work and others that probably could, just not the same job. SS has a trial return to work program but I think many are scared they'll get kicked off SS disability and unable to continue working.

short+sassy · September 2015

@blondie42107, thanks for the info! I never thought of it before, but I could see where SS retirement could be substantially diminished if a person was basically on SS disability for 20-25 of their working years. That's a substantial chunk of time they weren't putting into the system.

She does receive Medicare, but earns enough between the LTD and SSD that she does not qualify for any other type of assistance...though that might change after she is 65.

But, yeah, as a contrast I had a friend in college who was on SSD because she could no longer work as a server due to her disability. But that is why she was in college! So she would earn an education that would allow her to do something less physically intensive and get off SSD. She has been gainfully employed for many years now.

hoffse · September 2015

Thought I would add something to this. I was looking into this over the weekend, and something to remember is that disability payouts are taxable if the premiums are paid by your employer, but they are usually tax-free if you pay the premiums. Obviously that's something you have to check, but it can make a huge difference in how much you need.

I looked over my coverage again, and I was wrong - I have LTD provided at $2,000/month for free through my employer. That's great and obviously I will take it, but after taxes it probably wouldn't be enough. I think I will buy a separate policy for each of us to make sure we have enough coverage.

It looks like some policies also have an option to add on retirement contribution protection. A lot of the disability policies end at age 65, and if you only cover your COL expenses then you are out of luck in retirement. I got a quote for $15/quarter through the ABA for retirement protection. That seems pretty cheap for the extra security.

Sometimes I feel like we spend a fortune in various kinds of insurance, but I really do believe that you should insure for that which you cannot afford.

Thanks for bringing up this important topic! I have a list of financial goals for 2016, and I am definitely adding disability insurance to the list.

vlagrl29 · September 2015

I had never considered LTD - we have short term. Should you have both? What is considered long term - vegetative state? From what I know on our short term - things that would prevent DH from working like cancer treatments would qualify for a payout.

hoffse · September 2015

vlagrl29 said:

I had never considered LTD - we have short term. Should you have both? What is considered long term - vegetative state? From what I know on our short term - things that would prevent DH from working like cancer treatments would qualify for a payout.

Long term usually has terms like 10 years or until the age of 65. It has a waiting period, and the longer the wait period the cheaper the policy. The idea is you might be able to survive 6 months or a year on savings/short-term disability but if you continue to be disabled the long-term policy kicks in to protect your income, potentially until you reach retirement age. I think it would cover things other than vegetative state. Some chronic illnesses could prevent you from performing your job duties, and LTD would cover that if your policy is a good one.

vlagrl29 · September 2015

hoffse said:

vlagrl29 said:

I had never considered LTD - we have short term. Should you have both? What is considered long term - vegetative state? From what I know on our short term - things that would prevent DH from working like cancer treatments would qualify for a payout.

Long term usually has terms like 10 years or until the age of 65. It has a waiting period, and the longer the wait period the cheaper the policy. The idea is you might be able to survive 6 months or a year on savings/short-term disability but if you continue to be disabled the long-term policy kicks in to protect your income, potentially until you reach retirement age. I think it would cover things other than vegetative state. Some chronic illnesses could prevent you from performing your job duties, and LTD would cover that if your policy is a good one.

well its something to check into for sure. can't afford to add it to the mix of bills right now, but come springtime we will look into it for sure.

short+sassy · September 2015

vlagrl29 said:

I had never considered LTD - we have short term. Should you have both? What is considered long term - vegetative state? From what I know on our short term - things that would prevent DH from working like cancer treatments would qualify for a payout.

It can vary by policies, but typically short term is for only 6 months and LTD does not kick in until AFTER 6 months have passed. There are actually all kinds of conditions that can kick someone into LTD...not even necessarily something as severe as a vegetative state.

Cancer and cancer treatments can last that long or longer. Organ transplants. Heart problems. Bad car accident. Even dangerously high blood pressure will do it.

One of my coworker's friends was in a horrible car accident on New Year's Eve. He was in a coma for almost a month, was bed ridden for 6 months, and is now in physical therapy which will last about one year. He's lucky to be alive and not paralyzed, but it will be almost two years before he can go back to any kind of work.

My friend I mentioned above, who had been a server, got food poisoning from her workplace that permanently paralyzed her stomach. She was considered too disabled to work for a few years until she graduated from college and could work in a less physically intensive job. How's that for a crazy disability the average person would never even think of!

short+sassy · September 2015

@vlagrl29, LTD is also a lot cheaper than STD, because it is much less likely to happen. I'm making a grand generalization...but the monthly payment for it is usually about 1/2 to 2/3rds less than for STD.

vlagrl29 · September 2015

short+sassy said:

@vlagrl29, LTD is also a lot cheaper than STD, because it is much less likely to happen. I'm making a grand generalization...but the monthly payment for it is usually about 1/2 to 2/3rds less than for STD.

good to know. I think we will get LTD and up DH's life insurance by the time I get pregnant with #2

Long term disability insurance--Who has it?

Re: Long term disability insurance--Who has it?

Choose Another Board

Search Boards