Should I have Long-Term Disability Insurance?
Do you have Long-Term Disability (LTD) insurance? Do you know what LTD insurance is? To understand LTD insurance answer the question, “Who will pay my bills if I get hurt and become unable to work?” Everyone with a job should 100% have this.
Let’s not get LTD insurance confused with a post I wrote a few weeks back suggesting that those without dependents should skip out on purchasing Life Insurance. LTD and Life insurance are similar in the sense that they both insure your income against an unforeseen event that impairs your ability to work. However the important difference between them is that life insurance gets paid out only if you die while LTD insurance pays out if you become disabled.
Why protect your income for disability and not for death? Simple - today you might not have any dependents depending on your income, but YOU are dependent on your income. As long as YOU are around, you will need income to cover your expenses. If you are disabled, you will need this income. If you die, well then unfortunately you will not.
The government offers a form of LTD insurance through social security - but it is generally just enough to keep you above the poverty line and it is painfully hard to get paid out. As with all social safety nets - DO NOT RELY ON THE GOVERNMENT.
You can sign up for LTD insurance through most employers benefit plans. The costs and coverage are all across the board, but I can tell you that I currently pay less than $5 a week for my coverage. This is simply a no brainer. Be responsible with your life and protect yourself for the unexpected. If you do not have LTD insurance you owe it to yourself to look into it today.
For anyone looking for more details, I reccomend checking out a recent Business Week article.
