Is long-term disability coverage worth the cost?

Folks in Wisconsin aren’t averse to planning. They plan vacations, holidays, and big events in their lives. However, one thing that few people plan for is becoming disabled.

It may appear in the minds of those who work in a hazardous industry or have a family history of chronic, disabling conditions. But for the average worker, thoughts of long-term disability rarely enter into future planning.

Does this mean that purchasing long-term disability insurance is a bad investment?

Who would benefit from long-term disability coverage?

Long-term disability insurance is an insurance product that pays one’s wages in the event of an illness or injury that prevents them from working. To determine who cannot work, most insurers supply two definitions of disability.

The first distinction is someone unable to perform their current occupation. Say, for instance, a person operates heavy machinery and suffers an injury that prevents them from performing that duty but they can still do clerical work. This might be considered a short-term disability unless the inability to perform their duties persists for longer than the 3 – 26 week waiting period.

The second classification is an inability to perform any type of work. For example, a person who becomes paralyzed after a fall or develops a chronic, progressive condition like MS.

There are four categories of workers who should consider long-term disability insurance:

  • Sole providers
  • Parents with minor children at home
  • People with recurring injuries, such as those with chronic back problems
  • Workers in hazardous occupations, such as construction or law enforcement

How does long-term disability insurance (LTD) work?

In general, one would have to meet the Social Security Administration’s definition of disability to meet the requirements for an employer-provided long-term disability insurance claim. That is an injury or condition that requires medical leave from work for up to 12 months or a terminal/disabling condition that prevents work at all.

Applying for SS disability is sometimes mandatory to file a long-term disability claim. If approved, the insurance covers between 50% and 70% of base pay. That amount would be reduced by the amount paid by SS disability, and any bulk retroactive SSI payments would be used to reimburse the disability insurance company.

Remember that most insurers will not compel claimants to continue paying premiums after 90 days of inability to work.

To ensure that a disabling injury or condition will be covered, it’s important to sign up for this insurance at its initial offering. This is the time when pre-existing conditions will not affect coverage. If you need help with long-term disability benefits, reach out to the experienced attorneys at Alan C. Olson & Associates.


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