Why A Long-Term Disability Policy Is More Important Than Pet Insurance

October 11, 2017 | Michelle Andrews | Kaiser Health News / NPR

“It won’t happen to me.” Maybe that sentiment explains the attitude of many employees toward long-term disability insurance, which pays a portion of your income if you are suddenly unable to work for an extended period because of illness, injury or accident.

Sixty-five percent of respondents surveyed this year by LIMRA, an association of financial services and insurance companies, say that most people need disability insurance. But the figure shrank to 48 percent when people were asked if they believe they personally need it. The proportion shriveled to 20 percent when people were asked if they actually have disability insurance.

Long-term disability insurance generally has a waiting period of three or six months before benefits kick in. That period would be covered by short-term disability insurance, if you have it.

As the annual benefits enrollment season gets underway at many companies, disability coverage may be one option worth your attention.

Some employers may be asking you to pay a bigger share than before, or even the full cost. That can have a hidden advantage later, if you use the policy.

Or you may find that your employer has automatically enrolled you – or plans to – unless you opt out. A growing number of employers are going that route, to boost coverage that they feel is in their employees’ best interests, not to mention their own, since insurers usually require a minimum level of employee participation in order to offer a plan.

Benefits consultants agree that although long-term disability coverage lacks the novelty appeal of some other benefits that companies are offering these days (Hello, pet insurance!), but it can prove much more valuable in the long run.

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