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Why do I need a long-term disability insurance?

In an era where businesses all over Texas and throughout the U.S. are shifting more and more of the cost of insurance onto the shoulders of employees, it may seem that long-term disability is one of the benefits you can go without. You should consider this move from all angles, however, before making a final decision.

National Public Radio explains that long-term disability insurance can have a big impact on your lifestyle should you ever become disabled. These policies generally cover 50 percent to 60 percent of your normal income while you are unable to work due to accident or illness.

Many patient claims are made for chronic conditions such as cancer or back and neck injuries and the average claim period covers almost three years. Lengthy illnesses such as these are likely to wipe out any savings accounts you have and result in a mountain of debt.

Currently, about 40 percent of the nation’s employers offer long-term disability insurance, which typically costs about $250 per employee annually. This small amount is usually paid by the employer in full or with little cost to you, the employee. However, more and more companies are opting to offer this benefit as a voluntary option, which you would have for entirely

If you do enroll and pay the premiums with after-tax dollars, the benefits you would draw on in a disability scenario will be tax-free. Another option some employers have begun to offer covers a core benefit of replacing between 40 percent and 50 percent of lost income, with an option for employees to pay for increased disability benefits of up to 60 percent or 70 percent of their salary.

Insurance consultants, with some insight into the human tendency to think “It will never happen to me,” warn that a voluntary, opt-in disability policy will have fewer takers among workers like you who may need it down the line. This warning is further bolstered by an estimate from the Social Security Administration that 25 percent of those who are 20 years old now will become disabled before they turn 67.  

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The Law Office of Jessica Taylor, PLLC

The Law Office of Jessica Taylor, PLLC
14100 San Pedro Avenue
Suite 602
San Antonio, TX 78232

Phone: 210-265-6759
Phone: (210) 402-4022
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