Dìsability Insurance

[GRG a/k/a goldenrulegirl]

Do you have long and short-term disability insurance?

Is it an employment benefit?

Or, do you buy it privately? If you buy it privately, who is your insurer?

DH works for a small company. It's a good job, the owner is a good employer, but the company offers minimal benefits. We have rounded the corner on 50 and I am starting to worry that he doesn't have any disability coverage. He ruptured a disk in his back last summer and had neurosurgery. Fortunately, his employer paid him during his recovery, but there are no guarantees if something longer term arose.

Is the presumed peace of mind that comes with LTD worth the cost, or would we be better of putting.the money away and "self-insuring"?

[Tired Tess]

Goldie, thanks for this thread. these are the same question i have. my questions are do you pay monthly? when do you stop? are you paying DI from your retirement income? if you are disabled how are you expected to continue to pay? I have NO idea how this works, however I have DI through my employer.

[Gardening Grandma]

I had disablilty coverage as a benefit when I was working. Personally I think too many people focus on life insurance and neglect disability ins. If you choose to self insure, can you afford to go permanently without a paycheck if you (or your DH) became disabled? I doubt that many could.

[tractor]

I purchased long-term disability insurance on my own when I first started working ( I was 21), as such, my payments now seem quite low compared to the benefits I could receive. I pay around $320/year, and couldn't find anything close to that now that I am 41. I have a policy through Northwestern Mutual Life. I am also covered through my employer, so I am double covered, this typically isn't allowed, but since I had my own policy first there is nothing they can do about it. I have been told that should I need it, I would make close to what I make now if something should happen and I would no longer be able to work. I have short-term through my employer as well.

I was convinced early on that the potential to become disabled was much higher than dieing, and the money spent on long-term disability insurance was one of the best investments I could make in the future. I hope I never have to use it, but you can't buy it after-the-fact. I will never have to worry about making a house payment or supporting my family should something happen.

[GRG a/k/a goldenrulegirl]

No, we are not in a position to get by without DH's income -- not even close -- which is why I want DH to get some disability coverage. I also think I need some. I don't work outside the home at the moment, but I make it possible for DH to do so. ;D

[tractor]

I should add that I drive almost 50,000 miles a year, so I figured the chances of me getting in a car crash were quite high, strangly enough, I have been in three crashes, totaled two cars, and have walked away both times.

Rose, my understanding is once you are drawing on your policy, you no longer have to make payments. In essence, you have cashed it in and they not get to pay you.

[GRG a/k/a goldenrulegirl]

Rose, depending upon the insurer, you can pay monthly, quarterly, or annually. I think you stop paying when you either become disabled or retire. You are replacing earned income (I.e., from a job).

[tractor]

Jul 26, 2011 10:12:47 GMT -5 GRG a/k/a goldenrulegirl said:

No, we are not in a position to get by without DH's income -- not even close -- which is why I want DH to get some disability coverage. I also think I need some. I don't work outside the home at the moment, but I make it possible for DH to do so. ;D

Your policy would be cheaper than his as the amounts are risk based. I hope it's not too late for you, but with his age and previous injury, I would suspect long-term disability insurance will be very expensive. I was told that to replace my policy at my age it would be 10 times the cost I now pay (starting early gives me a huge advantage, my costs have stayed the same for 20 years).

[raeoflyte]

I have private short and long term disability. Short term is with Colonial and long term is Intermountain financial. My long term policy is actually only good for 2-3 years in case of total disability, but that should give us long enough to get through the appeals process with social security and we could live on that amount if we had to.

Years ago my homeowners insurance had an option that I we could have our home (a triplex at the time) insured so that the mortgage would be paid off if one of us passed away or was permanently disabled. I *really* wish we had done that because I can't find it now. A paid off triplex to live and rent the other 2 units, plus ssdi and hopefully a working spouse would be a good 'worst case scenario'.

But for the more common injury that required several months off to heal, this gives us the peace of mind that we could weather it without financial worry.

[Deleted]

My DH has long term disability though met life, you pay about 2-3% of your wage and they cover about 60% of your net. If your employer pays for it, the disability payments are taxed, if you do it, they are not. For ours, there is a 90 day waiting period. Since we could not self-insure (because we could not do without his income) we insured him. Once we do not need his income we will drop the insurance.

[Deleted]

Jul 26, 2011 10:20:15 GMT -5 raeoflyte said:

I have private short and long term disability. Short term is with Colonial and long term is Intermountain financial. My long term policy is actually only good for 2-3 years in case of total disability, but that should give us long enough to get through the appeals process with social security and we could live on that amount if we had to.

Years ago my homeowners insurance had an option that I we could have our home (a triplex at the time) insured so that the mortgage would be paid off if one of us passed away or was permanently disabled. I *really* wish we had done that because I can't find it now. A paid off triplex to live and rent the other 2 units, plus ssdi and hopefully a working spouse would be a good 'worst case scenario'.

But for the more common injury that required several months off to heal, this gives us the peace of mind that we could weather it without financial worry.

You would be better off getting term life insurance then mortgage insurance. The premiums are about the same, as time passes the mortgage insurance pays less, vs the term insurance which does not.

[hockeygrl]

I have LTD that I pay for as part of a group plan through a trade group I belong to. It has a 90-day waiting period, then a review at one year and periodically afterwards, but will pay up to SS age if necessary. The only reason I can get it is because it is a group plan. I wish I had short term disablity, but there are no group plans that I qualify for, and I can't pass a physical and/or job test to get it. My hubby has neither, but losing his income would amount to losing the savings and investment monies we set aside each month, so we would just stop saving and investing for a while.

We have an emergency fund, roth IRAs, and as a last resort could cash in our 401Ks if we needed to get by. Luckily, our debt is minimal - house, car, and student loans - and our savings is such that we could pay them off and get by on strictly my hubby's income, even though it would be a greater than 50% cut if we lost mine.

Here's to hoping we never need disability insurance, no matter what!

[raeoflyte]

Jul 26, 2011 11:06:03 GMT -5 @gin1984 said:

Jul 26, 2011 10:20:15 GMT -5 raeoflyte said:

I have private short and long term disability. Short term is with Colonial and long term is Intermountain financial. My long term policy is actually only good for 2-3 years in case of total disability, but that should give us long enough to get through the appeals process with social security and we could live on that amount if we had to.

Years ago my homeowners insurance had an option that I we could have our home (a triplex at the time) insured so that the mortgage would be paid off if one of us passed away or was permanently disabled. I *really* wish we had done that because I can't find it now. A paid off triplex to live and rent the other 2 units, plus ssdi and hopefully a working spouse would be a good 'worst case scenario'.

But for the more common injury that required several months off to heal, this gives us the peace of mind that we could weather it without financial worry.

You would be better off getting term life insurance then mortgage insurance. The premiums are about the same, as time passes the mortgage insurance pays less, vs the term insurance which does not.

We do have life insurance (need to get policies outside of my job to be on the safe side). The insurance they quoted me would actually pay off the mortgage if one of us was permanently disabled in addition to if we passed away. I haven't been able to find long term disability insurance that would do anymore than monthly payments at 60% of our earnings, and nothing that would insure us for more than a couple years when ssdi should kick in. Maybe I need to shop companies? The nice part of the paid off triplex is it would cover our housing, plus additional living expenses since I'm assuming if one of us was permanently disabled we'd have additional medical expenses, child care expenses, etc.

[gobermitcheese]

Questions I have:

Is SSDI taxed as income?

If your employer provides disability do you still buy your own policy. I like the idea of having my own policy outside work that I can take with me if I leave and has a stable premium but I am curious how others avoid having too much insurance or policies that cover the same stuff.

How do these policies work with employer policies and SSDI?