Long-Term Disability Insurance and Supplemental LTD

November 11 ,2011 by admin

According to statistics released by the American Council of Life Insurers, at least a third of all Americans aged between 35 and 65 get disabled for a period not less than 90 days. The same statistics show that one out of seven people will be disabled for over five years. Although many people hate to admit it, it is always good to be prepared for such unpleasant surprises. These statistics are only a wakeup call that we should prepare ourselves for such eventualities in life.


Shopping for disability insurance can be an unlikable experience as one is normally forced to think of unpleasant situations that may arise. By taking a disability insurance, it does not mean you will be disabled, it only means that you are preparing yourself and keeping your health in order should anything arise and you are rendered unable to work for a considerable period of time.


Many people normally associate disability with freak and careless driving and accidents, but you can rest assured that most long-term absenteeism from work are caused by diseases such as cancer and heart complications. Nothing can be compared to the devastation and inconvenience that comes with the loss of income. Many people end up losing their homes to foreclosure and sometimes reach a point of filing for bankruptcy.


The good news is that you can avoid all this by planning ahead of time when you are still healthy. The last thing you would want is to rush when you are sick already. Take your time to shop around for the most suitable disability insurance as per your budget and needs. When searching for the most suitable disability insurance, you might want to consider taking a long-term disability insurance coverage. This is however not available to term-of-project short-hour and term-of-project-full time employees. It is divided into two options:-

–          An employer paid benefit which equals to 50 per cent of your total monthly income, up to a benefit of $20,833 a month. As the name would suggest, it is paid by the employer, and all benefits that you get are subject to state, federal, local, and social security taxes.

–          The other option is the employee paid benefit which amounts to 50 per cent of your total monthly pay, up to 20,833 a month. What you contribute to this insurance coverage is an after-tax basis, meaning that all benefits received are not subject to taxation.


There is also the supplemental long-term disability insurance option available which you can enquire about its detail from your disability insurance service provider. Generally though, it is an employee paid plan equal to an extra 10% of your total monthly pay, meaning you will end up paying 60% instead of a 50% benefit and the maximum benefit will be at least $25,000 per month.


When all is said and done, it is to be mentioned that you can only be entitled to receiving these benefits when you are disabled as stipulated by the plan.