How many of you guys have long term disability insurance. I have a job where I travel 20% of the time and the other 80% is in the office. I looked into LTD Insurance and it just seems so expensive. I have plenty of life insurance etc. I just don't see it being worth it. Please share your thoughts.
I looked at it carefully and came to a few conclusions. To get a policy that pays you the $120,000 a year that you would need for 24-hour home health care, you really have to shell out some dough . . . wasted money if you never need it. But you don't want to spend 10 years in a gulag Medicare nursing home as an invalid either. So if you have high income and can afford the note, then you can have the assurance that you will have coverage. However, if you have high income and have invested well and you can cover perhaps half of that amount with investment income, then you can get a cheaper (still expensive) policy that pays for the other half and save a lot of cash. Carrying that further, if you have enough investment income to pay all of that, then you can afford the care and don't need to waste the money on insurance. Determining how big the pile must be to assure you of coverage is subjective. A man with a family doesn't want to spend his entire nest egg paying for his long-term care and leave his family with no assets. Another man with no dependents is foolish to die with all of his money and should plan on expending most of it by the time of his death. Experts say that you can take about 4% of your portfolio each year without much chance of reducing your investment value. So a man with a family that wants to leave most of his net worth behind would need to have a $3 million portfolio to provide the 120,000 needed for long-term care. A man with no dependents can take bigger profits and get by with perhaps $1.5 million.
I don't carry Short Term Disability, because I can self insure for at least 6 months. Long term is a necessity, in my opinion, especially if you have a family. What time of elimination period are you looking for? I have a policy with a 180 day elimination period on my policy because we can live somewhere between 6 and 9 months on savings. The benefit, for me, would be 75% of my gross income from my job. That is enough to pay the the mortgage, buy food, keep the lights on, keep paying health insurance premiums, pay the kids tuition, save for retirement, save for emergencies, and provide some reduced expendable income. I pay 8 dollars a month for a policy I purchase through my employer. ETA. LEft out something vital. My employer pays 75% of the premium.
We must be talking about different coverages because my policy was priced at $130 for about 6k per month in benefits. Obviously at $32 I would do it.
There are different plans. Both long- and short-term disability insurance are intended to replace your current income if you become disabled and cannot work. I have good disability insurance which I will drop when I retire, because a disability will not affect my retirement income. I was referring to long-term care insurance, which is frightfully expensive, but it is intended to cover the costs of long-term home heath care if you become an invalid in old age or due to accident. In my case, I don't find it worth the cost.
Are you buying as an individual or a group, how old are you, and what kind of elimination period are you talking about? I'm 30, buying in a large group policy, and have the longest elimination period offered. Also I am only going to receive a benefit of 4500 per month.
Looks like 90 day elimination. I'm 31 and buying as an individual. I'm self employed. Looking at 6,200/month. I just don't see the jump in price from your plan to mine. I guess I need to shop it. Like I said, at 30 bucks or even 50 or 60, I can see it making sense. At 130, I'd rather buy a handgun and be prepared to turn a disability into a life insurance windfall.
Longer elimination period, smaller benefit, plus a group could easily drop the price. If you go the bullet to the head route make sure you have gone past the two year contestability period. ETA: Just looked at a pay stub. My firm pays 72 a month for the LTDi. Total Premium is 80 a month not 32.
Okay, that makes more sense. 80 vs. 130. So then my question to you is, would you pay the full eighty if your employer didn't offer it. A thousand bucks a year.
Yes. I am not able to self insure for an indefinite period of time. My wife has been out of the workforce for 5 years, and could not get a job which would replace 75% of our income.
