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| Long Term Disability Insurance
A healthy person's likelihood of experiencing an extended disability at some point in his or her earning years is much higher than his or her probability of dying prematurely. Like life insurance, the purpose of disability insurance is to replace lost income. Hence, while many people have no need for life insurance, most working individuals do need long-term disability coverage.
Because disability insurance is intended to replace earnings, many policies provide benefits only until age 65 - even though many people plan to work beyond that age. Better policies offer a lifetime benefit, or at least a reduced benefit after age 65.
Consider:
The best policies in this category define disability as the inability to work in one's own profession, and define that profession as narrowly and precisely as possible. Thus, an architect who is unable to execute house designs can collect benefits, even if he decides to take on fine arts.
Unlike term life insurance, disability coverage is relatively expensive. One strategy for lowering disability premiums is to select a longer exclusion period - the period of self- insurance before disability benefits are paid out.
In many cases, purchasing a private, supplemental disability policy is a very good idea because your employer may not be providing sufficient disability coverage. Many group plans provide only 50% of your base income; others are capped at relatively low income levels.
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