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Long Term Disability
  Long Term Disability Insurance
Purpose: Designed to replace one’s income while one recovers from the inability to perform the regular duties of his/her ccupation, due to an accident or illness.

The three main categories are: Own Occupation; Regular Occupation; and Any Occupation.

Own occupation means that if you are unable to perform your regular occupation and are eligible to receive benefits, you will not be prohibited from working or receiving remuneration from another unrelated job.

Regular occupation means that if you are unable to perform your regular occupation and are eligible to receive benefits, you aren’t permitted to work at another job while receiving benefits.

Any occupation means that you will not receive benefits while you are able to perform any occupation for which you are suited by education or training.

Premium Type:

Non-cancelable and guaranteed renewable is the most sought after plan. With this type of policy the carrier can’t raise premiums, usually to age 65, coverage can’t be cancelled and the policy’s terms are fixed at issue.

Guaranteed renewable is another type of plan. Coverage can’t be cancelled; but, premiums can be increased based upon the company’s experience. Usually policy increases are by class, as opposed to being based on an individual’s experience.

Benefit Status & Limits: DI plans generally replace a maximum of anywhere from 60% to 66% of one’s regular income and benefits are received on a tax exempt basis. The higher one’s income the lower the percentage of income replacement that is available.
Elimination/Qualifying Period:

Before benefits begin to be paid an elimination or waiting period must be satisfied. The shorter the elimination period, the higher the premium. Common waiting periods are 30 days, 60 days, 90 days and 120 days.

The most frequently promoted waiting period is 90 days, usually to keep costs affordable; however, about 90% of disabilities are cleared up within 90 days.

Benefit Period:

The benefit period is the length of time during which benefits could potentially be paid while one is disabled.

Some occupations are considered high risks for disabilities from occupational accidents and are frequently limited to short term benefit periods.

Benefit periods can range from 2 years, 5 years, 10 years or be level to age 65. A benefit period relates to each incident of disability.  One can recover from a covered disability and subsequently suffer another condition, covered by a new benefit period.

The potential amount of benefits to age 65 are frequently stressed; however, approximately 97% of disabilities are clear up with one year.

Partial Disability Benefit: Some policies will pay partial benefits if you are only able to work part time due to a disability. It is important that the partial disability benefit is available prior to the insured becoming totally disabled because there are a number of degenerative diseases that could lead to a partial disability before developing into a otal disability.
Residual Disability Benefit:

Some policies have a provision that pays you benefits even if you have returned to work on a full time basis and are able to perform all your principal duties, if you suffer a reduction in income.

Cost of Living Benefit: An optional benefit rider which causes the policy’s benefits to increase with inflation each year the insured is disabled.
Future Purchase Option: An optional benefit rider which permits an insured to purchase additional coverage when his/her income justifies an increase in benefits. The additional coverage is not subject to medical evidence, solely proof of income.
Free Report for more details: Refer to Free Report section to request a Free Report on Long Term Disability.
Free Quote: To request a Free Quote refer to Quotes section.