Long Term Disability Insurance: How It Works

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According to the CDC, 61 million working age Americans are living with a disability. According to the Council for Disability Awareness, 51 million of those individuals aren’t covered by disability insurance.

That is an extremely large number of people that must struggle financially everyday. If they had purchased long term disability insurance, they would be leading a much higher quality of life. 

Is it possible that many people neglect to purchase long term disability insurance because they don’t exactly understand how it will protect them?

If you’ve ever wondered that very question, by the end of this article, you should clearly understand the value a long term disability insurance policy brings to your financial security.

What is Long Term Disability Insurance?

The simplest way to explain long term disability insurance is an insurance policy that will pay you monthly benefits that will allow you to pay your living expenses in the event that you become disabled.

Short term disability insurance will cover you immediately for a short period of time, and many jobs offer this type of insurance as part of their benefit package.

However, short term disability insurance benefits only last a certain amount of time. Long term disability insurance will cover disabilities that last longer than three months.

Statistics show that the average length of a long term disability is two to three years. These facts prove the necessity of long term disability insurance benefits. 

Who Should Buy Long Term Disability Insurance?

Many people go through their lives hoping to stay healthy and safe and they take precautions to keep it that way. However, accidents are just that; accidental. 

You can be the more cautious person in the world and still become disabled, through no fault of your own.

Most people consider long term disability insurance a good investment if they work at dangerous jobs or earn a high income. 

Yes, these individuals should definitely purchase long term disability insurance, but they aren’t the only ones.

Anyone who relies on their income to live or provide for their family should protect that income should a tragedy befall them that renders them unable to continue earning that income. 

The biggest reason that most people don’t buy a long term disability insurance policy is the cost. 

Most policies are based on how much money you earn, so the cost of your policy would really depend on how much you can afford. 

How Much Will Your Disability Insurance Pay?

Just as the cost of your policy would depend on your income, so would the benefits that you could expect.

Long term disability insurance policies do give you some choices as your payout but most offer a certain percentage of your current income. 

There are other factors that will affect the cost of your long term disability insurance. You can get a free quote from many of the best insurance companies here. 

What to Look For in a Long Term Disability Policy

As with most financial services, you can’t expect them all to be of the same quality. While some insurance providers are good at providing a low cost policy, do they provide you with the benefits that you need in the end?

To make your long term disability insurance policy worth your money, you should make sure that your policy meets certain standards.

One important part of a solid insurance policy is the definition of disability. The one you would most benefit from is a policy that carries an own occupation definition of disabled.

With this policy, you will receive benefits if your disability renders you unable to continue your current position. 

There are lesser degrees of disability definitions such as any occupation, which will not pay benefits to you even if you can’t work at your current position, but can work at another job.

For example, a surgeon could become disabled and be unable to continue his profession due to that disability. 

However, if his long term disability insurance has any occupation definition of disability, and he could get a job as a gas station clerk, he won’t receive any benefits.

Obviously, he has taken a large cut in salary from a surgeon to a gas station clerk, but he will get no help from his insurance policy to continue paying his mortgage, car payments, and lifestyle that he could afford before. 

You will want to also ensure that your policy has an elimination period and benefit period that you feel comfortable with.  


Don’t let a disability creep up on you before you are able to protect yourself from the financial ramifications. Purchase long term disability insurance right away so that you don’t become a statistic. 

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