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Understanding Long Term Disability Insurance

Most people make sure they have life insurance, car insurance, health insurance, and some people even purchase insurance for their pets. But for some unknown reason, many people do not think about long term disability insurance.

Disability Insurance

The purpose of this type of insurance is to protect your income if you become disabled and can no longer work. Long term means exactly what it says. If you throw your back out and can't work for a few days, you don't need insurance, because hopefully you are in a good financial position to sustain you and your family through a few days of lost income.

But suppose you are in an accident, or develop a medical condition or illness that keeps you from going to work or weeks, months, years, or even the rest of your life. How will you pay your bills? How will you live? Long term disability insurance is designed to cushion you against such problems.

There are a variety of long term disability insurance policies available, so take your time and find one that suits your needs. Consult with a financial planner who can advise you on what type of policy is best for you and for what amount you should purchase.

Here are some important questions to ask before purchasing a policy:

  1. When do the benefits begin? Some policies require that you be disabled for 30, 60, 90 days, or even longer before you start receiving any income.

  2. Are there any exclusions? In other words, what is not covered? If you are self-employed and are injured, are you covered? Are there any pre-existing conditions that are not covered?

  3. How long do the benefits last? You may be tempted to save money by purchasing a policy that has a shorter benefit period, but if you have a long-term illness, you may be in trouble.
This type of insurance can be costly, but when you consider the alternative, it's worth the peace of mind for you and your family.

See also: Life Insurance and Car Insurance

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