Should I purchase LTD from employer?

[WarEagle]

Debating if i should purchase LTD insurance from my employer. I'm 29 years old in a low risk working enviroment, pretty healthy I believe with a stay at home mom with 1 child. The LTD plan begins after 90 days and is payable for the 1st 24 months after the 90 day elimination period if not able to perform for MY own occupation. After 24 months, it's any occupation. Coverage wages is roughly 10k monthly with a premium of $12.50 a week pretax. I guess you can say i don't ever see myself becoming disabled and the premium of $650 a year being wasted (actually about $475 after taxes). Let me know if i'm looking at this incorrectly. Any help or thoughts would be greatly appreciated. Thanks!

[MonkeyMama]

Anyone can be disabled at any time.

Do you drive in a car? Ever considered if you were in a car wreck?

My very healthy father had a stroke and a heart attack a couple of years back (out of nowhere) and was on disability for a while. He was unable to work for about a year.

My 33-year-old husband was diagnosed with a brain tumor last year. I was diagnosed with a tumor this year. You wouldn't meet 2 more healthy people. Due to our youth & health we will likely recover quickly without any long-term disability, but it just opens your eyes to what can happen. Debilitating illnesses arise out of nowhere, no matter how healthy you are.

Before when friends would tell me they don't need health insurance, I would always say, "What if you got in a car accident? What if you were diagnosed with a brain tumor tomorrow?" (Since I know so many young people dealing with debilitating brain tumors). People shun disability insurance for the same reasons they shun health insurance, which is why I mention it.

Personally, I would buy the insurance. Though I would shop around and see what else is available - pick the best insurance from the options available. That said, the insurance sounds like a good deal.

[disneysteve]

i don't ever see myself becoming disabled

Nobody ever sees themselves becoming disabled.

People happily buy life insurance but ignore LTD insurance even though the odds of them becoming disabled are something like 5 times greater than them dying prematurely (don't quote me on that figure).

I'm a physician and I could tell you any number of stories of freak accidents and unusual illnesses that disabled otherwise young, healthy individuals. I have a patient who tripped in a parking lot 2 years ago and bumped her head on one of the concrete dividers between the spaces. Hasn't worked since. I had a friend who slipped on the ice on her porch and was wheelchair-bound as a result. I have a friend who slipped on a wet floor walking into Wal-Mart and broke her hip. I have a 20-something cousin who was diagnosed with breast cancer right after having her first child.

The point is anything can happen anytime to anyone. It pays to be prepared.

[jpg7n16]

Insurance is a wierd product. It's one of the few products you buy that you hope you never have to use. (car jack, mace, hand gun, insurance, tornado/bomb shelter, etc)

I'd also like to emphasize the points made above that physical disabilities aren't the only things that qualify. Cancer is becoming pretty common, and if it makes it so that you can't work - what would you do? You'd need both health and LTD coverage. (health for the medical bills, LTD for the loss of income)

[DebbieL]

Debating if i should purchase LTD insurance from my employer. I'm 29 years old in a low risk working enviroment, pretty healthy I believe with a stay at home mom with 1 child. The LTD plan begins after 90 days and is payable for the 1st 24 months after the 90 day elimination period if not able to perform for MY own occupation. After 24 months, it's any occupation. Coverage wages is roughly 10k monthly with a premium of $12.50 a week pretax. I guess you can say i don't ever see myself becoming disabled and the premium of $650 a year being wasted (actually about $475 after taxes). Let me know if i'm looking at this incorrectly. Any help or thoughts would be greatly appreciated. Thanks!

You would be insane not to take it IMO. NOBODY ever sees themselves becoming disabled. It sure happens though. Take it - now!!!

[WarEagle]

I'm gonna go ahead and sign up for it, thanks for everyone's response.

[disneysteve]

I'm gonna go ahead and sign up for it, thanks for everyone's response.

Hopefully, you will never need to file a claim, but if you do, you'll be very happy you made the decision to take the coverage.

[bennkar]

I'm a bit of contrarian on this issue as I have never carried LTD. You should determine how likely it is you couldn't do the work you're doing now if you got ill or hurt. Some work is of the type if you're not up to snuff, then you'll have serious problems - in which case LTD may be a good choice. If you do something you can do even disabled to some extent, then its not so cut and dry. Because remember, its whether or not you can do your work, not whether you can do it as easily as you do it today. If, like in my case, you work most of the day on a computer, the employer / insurer can make special accomidations to make it so you can work, so the liklihood of needing the insurance is minimized. Also, its only good for 24 months. What if you can do some type of work, just not what you're trained for? You're still out of luck.

Also, what's the likelihood you can be hurt, and it won't be covered by other insurance (house or car) or be someone else's fault? Yeah, you may not get your wages reimbursed if it is your fault, or some type of disease, but if it someone else's fault you can sue to get their insurer to pay for lost wages.

I guess my point is, that while yes - something bad can happen, its not as likely to happen as some believe. You need to look at your situation (married with a child, and perhaps how reckless you are), how much money and what type of a back up plan would you have if something bad happened that wouldn't be covered by other means, and how likely is it an insurance company would say that you couldn't work given your profession. If you take everything into account and feel you need the insurance, get it. But don't be scared into buying what you don't need, make an informed choice. I have made this analysis different times and decided I didn't LTD insurance, and that choice has worked out well.

[MonkeyMama]

To add to DisneySteve's examples, I forgot a client of mine who was assaulted and put on long-term disability for psychological reasons. Maybe physical reasons, too. The possibilities are rather endless.

[snafu]

Glad you've decided to get LTD but please check on-line to evaluate whether the premium is in line with the market place.

[Robert742]

I think you made the right decision by buying it. I knew a co-worker that passed on it, and regreted it a few years later. She, like a lot of people, did not expect to be disabled, either.

It is never a bad idea to shop around, but up to 10k a month benefits is good for what you are paying, if you make that amount or more a month. If you make a lot less, you may get a better deal by shopping for less benefits. You get a percentage of your income, so if you make 5k a month, you will not be paid 10k, or even 5k a month in benefits.

Also, paying your premium pre-tax means your benefits will be taxed as income.

If you can get LT disability insurance at a decent price, you should get it, even if it is hard to be disabled from the work you do.

If I can think, use a computer, and talk on the phone, I can do my job, but I don't know if I could do it if I was having chemotherapy. Alas, I don't have group LT disability available for me.

[bennkar]

If I can think, use a computer, and talk on the phone, I can do my job, but I don't know if I could do it if I was having chemotherapy. Alas, I don't have group LT disability available for me.

I agree that working while going through chemotherapy would be hard, but it wouldn't be your choice on whether you could not work and get paid LTD, it would be up to the insurance company. I'm not saying you wouldn't get it, but if there is any grey area, they will more likely than not say you need to go back to work and not make payments. And just imagine going through chemotherapy and then adding in the stress of fighting your insurer to get what you feel is right.

I'm not saying you should pass on LTD insurance, but that you should weigh your situation and determine if it really makes sense for you. If it does, then sure, get it. But do it understanding that insurance companies are in business to make money, not because their shareholders like helping out people.

[DebbieL]

By the way, the rates you are getting are great. About 10 years ago I was quoted at least $75/month premiums on a policy that would have only covered about $1,600/month income.

[Robert742]

I agree that working while going through chemotherapy would be hard, but it wouldn't be your choice on whether you could not work and get paid LTD, it would be up to the insurance company. I'm not saying you wouldn't get it, but if there is any grey area, they will more likely than not say you need to go back to work and not make payments. And just imagine going through chemotherapy and then adding in the stress of fighting your insurer to get what you feel is right.

I'm not saying you should pass on LTD insurance, but that you should weigh your situation and determine if it really makes sense for you. If it does, then sure, get it. But do it understanding that insurance companies are in business to make money, not because their shareholders like helping out people.

What you are saying is very true, but I would not recommend passing on LT disability because of the hassle of the claim process. There is a lot of fraud in disability claims, so insurance companies will fight you tooth and nail with certain disability claims.

Insurance should be to protect you from catastrophic loss, so if you have a non-insurance solution to many of the risks in life, go for it.

[disneysteve]

I agree that working while going through chemotherapy would be hard, but it wouldn't be your choice on whether you could not work and get paid LTD, it would be up to the insurance company.

Insurance companies are in business to make money, not to pay claims. That is true. However, a legitimate claim will get paid if it is properly documented. I've helped dozens of patients file claims over the years and I'm pretty sure I've had 100% success in getting them approved for disability. It may have taken a while, required an attorney's involvement and there may have been a few rounds of appeals, but it was ultimately just a matter of providing exactly the information or wording that the insurance company was looking for to sign off on the claim. So having a good relationship with your physician and your disability attorney is the key to success when filing a disability claim.