What are the reasons to get both Short-term and long-term disability income insurance?

Question

I'm thoroughly confused as usual. But, if you have the option to get both short and long term disability insurance why would you? Does the short term cover things the long term doesn't? Doesn't long term cover the short term period as well anyway? Or do you have to have both to be covered in the immediate future and long term??? Why does everything have to be so complicated why cant there just be one kind of disability insurance its soo annoying....Which one would you get or would you get both???? arrrrrrrrrrrgggggggggggggggggggg. I'm only 28 so don't know if thats a factor, in relatively good health...but in a profession that can be dangerous. Mental health field, direct care. What about individual policies, should I consider paying outside of the company if they dont offer both of these.....

thank you for any assistance

Answer 1

ok, normally long term insurance has a elimnation period of 6 to 12 months before you get any payments.

the short term normally cover that first 6 months to a year.

You will need both to be fully covered.

Lets say you are in a car weck and can't work for 9 months,
you get no pay check, you can't pay your health insurance premuim you lose your car and your house and so on.

Lets say you are in that same car wreck and can never work again, how will you live, pay your bills and so on.

But some people have enough money saved to pay all thier bills for that first year or first 6 months, and can take the risk of not having short term,

Others can't afford the long term which costs alot more, so they buy the short term, to at least cover the more temp issues,

Answer 2

1

Answer 3

Go with the advice of the financial planner above. Couple of thoughts:

1) If you are in CA, you probably don't need Short-term Disability if you or your employer pay into the CA - SDI program. That covers you for up to 365 days. You would only need LTD in CA.
2) Group DI may be your only choice, given your profession. Individually underwritten DI is probably not available to you due to your occupation classification being high risk. Individually owned DI is more benefit rich that group DI and as such costs more.
3) Consider critical illness (CI) insurance. It's a relatively new concept in the US (been sold for years in Europe and Canada) . It pays you a lump sum when you are diagnosed with a covered condition or illness. DI replaces some or all of you income. CI pays a lump sum. Different coverages, but both helpful if something happens to you.

Answer 4

You are absolutely right. It is confusing.

For me, as an advisor, I would say that an insurance that pays you a lump sum benefit is the most important feature of a plan.
In times of emergencies, e.g involved in accident and then hospitalised for 3 months and then become disabled, a lump sum payout takes care of hospital bills, credit card bills, mortgage loan, living expenses. What's more cash on hand gives you a lot of flexibility and control. You can then invest the money and survive off the returns generated, which is basically the same thing that the disability income insurance can give you.

In your situation, I would actually recommend Personal Accident insurance since you mentioned that you are in a dangerous profession. However, if you would like something more comprehensive, you may also go for a basic insurance plan and attach a personal accident rider.

It is best to speak to a Financial Advisor near you to assess your needs and analyse the best insurance for you.

Answer 5

If you have already been diagnosed, no private disabiity insurance would pay out when you do go blind. You need this type of insurance before the event happens. If you get disabiity thrugh your employer they might cover you temporarily. But when it actually happens, you can apply for long term disability from Social Security, SSDI. You would also be entitled to SDI state disability if you are working at the time.

Answer 6

Get them both.

If you are disabled, short term disability will pay 100% of your salary for up to 6 months - then Long Term Disability kicks in, but federal law only allows it to cover up to 67% of your previous salary, and end when you turn 62. The corporate policy your employer offers will have the best rate out there.