A severe injury has taken you out of the workforce, and, now, you are worried. Your family depends on your income to keep the household running. While you have been diligent in creating an emergency fund of six months’ expenses, you prepared in another important way. You have a long-term disability insurance policy.
Even with all that planning, doubts and fears linger. And you wonder just how much money you will get through your long-term disability insurance policy. Will it be enough? How long will it last? The questions are nearly endless as you ponder the next steps, and that includes tightening your budget and a few family meetings.
Usually provides 40% to 60% of income
You know that living off your savings will not be enough to get your family through this experience. But you do have a secret weapon in long-term disability insurance whether the policy is through your employer or an insurance company.
Typically, long-term disability benefits cover 40% to 60% of your income. For example, if you are earning $50,000 a year as a truck driver or teacher in the Milwaukee area, you may receive $20,000 to $30,000 per year in disability benefits.
Insurance companies usually only cover up to 60% of your earned income to prevent fraudulent claims of disability. It just does not make good business sense for insurance companies to provide 100% of your income. It would be to your benefit to research any policies that pay up to 70% of your income.
Long-term disability insurance lasts five years or longer, depending as to whether your disability continues. A drawback, though, does exist regarding long-term disability insurance claims. Your first payment likely will not arrive for three to six months. But you prepared, and your family has some peace of mind.
If you have any questions regarding long-term disability insurance, Alan C. Olson and Associates has the knowledge to help you.