Top Facts About Long-Term Disability Insurance You Must Know 

Most people’s greatest assets are not their homes, health, or fitness. Instead, the ability to produce an income over one’s lifetime is one of the most significant assets. However, when a person faces a disability, likely, they would not be able to produce an income further. 

Premature death and disability can be challenging to deal with, especially for family members. Although, long-term disability insurance can be a sign of relief for people encountering disabilities of any sort. Most people do not know the basics of long-term disability insurance. There are companies that offer disability insurance which you must know about. 

Interesting facts about long-term disability insurance: 

• Coverage 

The common factor that confuses most people is the coverage of long-term disability. Long-term insurance has been designed to protect one’s income in case of severe illness or injury, which would otherwise disable them from earning. 

Although, there are some limitations or exclusions for long-term disability insurance. For example, criminal activities, civil disobedience, causing accidents while driving under the influence of alcohol or drugs, and self-inflicted acts can disbar one from cleaning the insurance benefits. 

The insurance covers cancer, chronic pain, lung diseases, neurological disorders, vision loss, hearing loss, Parkinson’s disease, autoimmune disorders, and degenerative back conditions. If you have experienced these health conditions, contact your insurance company and apply for a claim. 

• Benefits 

Besides the agreed monthly benefit amount, long-term disability insurance coverage generally allows a person to include extra benefits and features known as riders. It could allow one to customize their insurance policy and enhance the range. 

Adding riders to the insurance policy can increase your monthly premiums. Riders can further secure a person’s income and protect them from various scenarios that might not be covered in the initial policy. It would be advisable for one to protect their income from the worst-case scenarios using long-term disability insurance. 

• Income tax withholding

Some tax laws require employers to withhold income tax from disability benefit payments. However, tax regulations do not mandate withholding disability benefit payments. If an insurance company makes disability benefit payments, it is not mandatory by the tax rules to withhold income tax. 

• Cost 

Disability insurance costs can range from several factors. The insurance cost depends on the elimination period’s length, the maximum benefit period, age, premium structure, gender, health, state, optional rider, type of coverage, and benefit amount. If you are planning to purchase quality long-term disability insurance, you should expect to pay about 1 percent to 5 percent of your annual income for the policy.