Does anyone here have disability insurance? I have some questions.

[CanBeGrumpy]

My Dh is considering changing jobs, and the new company offers NO disability insurance. At his current job, he has both short and long-term disability that would pay 60% of his salary until he turns 65 should he become disabled. It is great coverage and the premiums are VERY reasonable.

I have been looking into getting an individual policy for him if he does change jobs, and oh boy, what an eye opener!! For the coverage I want (which doesn't even equal his actual income) it would cost $488/month!

Does anyone have an individual disability plan, and if so, what is the cost? Or, is there anyone on here that is an insurance agent that could fill me in on what is available and what it might cost for various levels of coverage? I definitely think this is a coverage EVERYONE should have, so going without is not an option, but maybe I could lower the monthly benefit.

Also, does anyone know how this works in conjunction with Social Security? I heard they will subtract your SS benefit from your disability insurance benefit and only pay the difference! That would be so unfair especially after paying those huge premiums!!

Thank you for any info you might be able to provide. I really appreciate it!

 

[Dan Murphy]

Individual disability insurance can be quite costly, though, as you have said, very necessary, considering the alternative.

One way to lower your premium would be to extend the waiting period before benefits start, maybe 6 months, even one year, with the assumption you/he can 'self-insure' a duration such as that with savings. You mentioned Social Security. SS rarely pays as the definition of SS disability is extremely hard to satisfy......

....Disability under Social Security is based on your inability to work. We consider you disabled under Social Security rules if you cannot do work that you did before and we decide that you cannot adjust to other work because of your medical condition(s). Your disability must also last or be expected to last for at least one year or to result in death...

If it does pay, it is not reduced by personally owned benefits. Though you can purchase, as a cost savings method, individual benefits that WILL reduce IF SS pays, thereby again, lowering your premium some. Or you can buy where it will not, though a somewhat higher rate.

In any case, you generally can not purchase more than about 60% or so of income as a benefit.

Hope some of that helps a bit.

(not to be considered insurance or financial advice)

 

[Jen_in_NH]

Does the company offer the option to buy into Aflac? The town my husband works for does, so he got short and long term disability from them. (Good thing, considering he can manage to get hurt breathing, let alone anything that involves power equiptment ) It's not too expensive - $25/wk (off the top of my head, the exact number is beyond me)

Jen

 

[barkley]

i had it through my employer and had a short, then long term (ultimatly became a permanant) disability. mine was for 80% of my "salary" (base, did not include any pay differentials i received based on years of service or managment duty-and they also reduced it to a lower amount because i had sick days without pay over the course of the prior year that had lowered my income). the standard waiting period is 90 consecutive calendar days (and if it is an illness that has caused intermitant absences they do not count those days). here is what i learned/experienced:

*application and receipt of funds from a carrier can take a long time (most make you wait until the 90 days have lapsed until you can apply in the event you recover-even if an m.d. states you will not, then processing can take 45-60 days with an actual check issuance taking another 10-15: in effect you can be waiting up to 6 months from the day you go out before you receive any funds),

*the contract drives what is counted against the benefits (in my state temporary state disability is available through most employers, i was required to apply for this and it was counted against my payment as was the sick leave i had on the books which i needed to use a portion of each month in order to retain "pay status" in to continue my medical coverage),

*the contract drives what you must apply for, this can include workmans compensation, state disability insurance and social security,

*some contracts have a repayment provision wherein if you receive any monies related to the period of disability (retroactive social security, workman's compensation, privatly held insurance...) you must repay all monies to the carrier.

that said i would look very carefully at any policy before contracting with a company (mine was a managment benefit at no cost so i did not have that luxury). the insurance can be a god-send once it begins to pay, you just need to be realistic as to what it actualy will pay and how long it will take to receive those funds.

 

[CanBeGrumpy]

Thank you for the responses!!! I appreciate you all taking the time to type out your answers. I have a call in to another insurance company so I'm hoping they can beat the quote I was given. It is such a costly insurance, which really stinks!! But I know I can't rest at night without *something*! Thanks again!