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Long Term Disability Income Insurance |
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Individual disability income plans generally offer benefit periods anywhere from 2 years to as long as lifetime. Many long term disability income insurance plans will pay benefits until age 65. With respect to disabilities that do last for longer periods of time, definitions (once again) are very important. In fact, while short term disabilities can be costly if one has no disability insurance, it is the longer term disabilities that can devastate a family's financial situation. For this reason, long term disability income insurance should be carefully considered in planning.
Long term disability income insurance policies can be made somewhat less expensive by extending the elimination period. This can help make long term disability income insurance more affordable. The premium for a long term disability income insurance policy can also be somewhat reduced through the use of an SIS rider. This type of rider can keep the long term disability income insurance more affordable and still allow the benefits to be payable until at least age 65.
Of course, extending the elimination period and adding the SIS rider may reduce the total dollar amount received from a long term disability income insurance policy, but when budgetary requirements need to be considered, this approach may be logical. If one subscribes to the belief that it is the long term disabilities that are the bigger financial threat, then protecting oneself with long term disability income insurance that is tailored in such a fashion that the long term benefits are still present but the elimination period is longer and the policy covers Social Security disability benefits not received may be prudent.
Here again, the definitions of long term disability income insurance are critical. ProVider Plus shows this clearly. If you have $1500 of SIS rider and Social Security actually pays $1,000, the SIS rider still pays $500. Beware of some competitors long term disability income insurance polices that pay nothing on their SIS (or SIO) riders if you receive any benefit from Social Security.
Long term disability income insurance should not be confused with group LTD plans. See Group vs. Individual Insurance.
Unlike individual long term disability income insurance plans, group plans can be terminated by the insurance company, your employer, or your leaving the company. This can effectively leave you with no coverage.
Some long term disability income insurance plans can pay for your entire lifetime, even if you are able to work in some other capacity, (other than your own occupation). Considering the potential to receive benefits for many years, the compounding of benefits when the policy has cost of living adjustment riders, and the fact that the coverage is normally guaranteed to be permanent (as long as premiums are paid timely unless they are waived during a claim), long term disability income insurance polices, such as ProVider Plus are extremely valuable in disability protection planning.
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Policy Forms 0100, 1100 and 2100 are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly-owned stock subsidiary of The Guardian Life Insurance Company of America ("Guardian"), New York, NY. Policy Forms NC111 and NC112 in CA are provided by Guardian. Product provisions and features may vary by state. |
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