If you are considering purchasing long term disability insurance, you may be concerned about the costs that you will need to pay for it. The coverage may offer an excellent financial safety net for you if you suffer from an unexpected illness or injury that leaves you disabled and unable to return to your job. While the price of long-term disability insurance may seem high, you should think about whether or not you would be able to afford to live on social security disability benefits and/or your spouse’s income if you became injured and were unable to work until you reach retirement age. If you wouldn’t be able to do so, then long term disability insurance may be a smart option for you. The costs of the insurance will depend on a number of different factors as well as the coverage options that you choose.
The Cost of Long Term Disability Insurance
On average, you should expect to pay between 1 and 3 percent of your annual income for long term disability insurance coverage. (Your costs may be slightly higher if you are a woman because women have higher disability rates.) The percentages are rough estimates because your cost will depend on the coverage you choose, your age and some other factors. When you are looking at the price of different coverage options, you should figure out what your monthly budget for disability insurance premiums will be, allowing yourself some cushion. You will then want to compare that with the different must-have coverage options in order to choose the policy that will work the best for your needs and for your budget.
Factors that Impact Cost
There are a number of factors that will impact the cost of your long term disability insurance policy. Your annual disability insurance premium will be affected by your gender, your age, your occupation and the amount of income you make at your job. Since women are more likely to suffer from disabling conditions, they can expect to pay between 2 and 4 percent of their annual gross incomes for long-term disability insurance coverage. People who work in riskier occupations will have higher premiums than people who work in low-risk office settings. For example, if you work in manufacturing, your long-term disability insurance premiums will likely be higher than they would for a financial advisor.
The younger you are when you purchase your long-term disability coverage, the lower your premiums will be. If your policy is non-cancelable, your premiums will remain at the lower rates for as long as you continue paying them. Smokers should expect to pay higher rates than non-smokers, and if you have a pre-existing condition, you should expect to pay more as well. If you are protecting a large amount of income versus a more modest monthly amount, you can expect higher premiums as well. Finally, your coverage options will affect the monthly amount that you will have to pay for your long-term disability insurance premiums.
Cost vs Example Benefits
There are different types of coverage options that might be available and that would be smart to select. Choosing a non-cancelable policy will prevent your insurance company from canceling your coverage or raising your premiums as long as you continue making your monthly payments. Adding a cost of living adjustment may be a good idea. If you do this, the amount you would receive if you were disabled would be adjusted upward for inflation. It is also smart to choose the own-occupation coverage option because it would allow you to continue receiving disability benefits if your disability prevented you from returning to your former occupation even if it did not prevent you from returning to a different type of employment. Getting a benefits period to age 67 is also a good idea in the event that you suffer a disability that permanently prevents you from returning to your job. Finally, choosing a policy that provides residual coverage for partially disabling conditions is a good idea because you could receive partial payments if you were able to return to work part-time but not to resume full-time work.
How your age and medical status figure in are also important. For example, a 35-year-old man who elects all of these coverage options and who has an annual salary of $50,000 might expect to pay about $45.16 for his monthly premium for a $2,500 monthly disability coverage benefit. The same man at age 50 could expect to pay around $70.55 per month for the same coverage options. If the 50-year-old man had purchased long-term disability insurance coverage when he was 35, his premium payments would have continued at the $45.16 monthly amount as long as he continued to pay them. Adding some of the riders to your policy will increase its monthly cost, and choosing shorter elimination periods will also make it more expensive. It is a good idea to read the fine print carefully for any policy you are considering and to ask questions to make certain that you get the coverage that you need to keep you protected in the event you suffer from a disabling condition.
What to do if your Claim is Denied
It can be overwhelming to believe that you have disability protection only to have your claim denied. If you receive a denial letter, it is important for you to read it carefully. It will list the reasons that the company based its decision on and will give you information about how you can appeal the decision. Many people whose initial disability claims are denied are later approved when they appeal, as long as the appeal is approached correctly and professionally. As your long term disability attorney team, we will make sure that you do not miss any deadlines and will likely will want you to request a complete copy of your claim file from the insurance company. The file will contain all of the medical reports, records and other evidence that the company used in order to deny your claim.
Most insurance companies have their own internal appeals process, and federal law mandates that you must exhaust all of the available internal appeals before you can file a lawsuit. We will work to build the favorable evidence for you in the company’s record to make it likelier that you will be successful during your internal appeals. To do so, we may want you to get additional objective proof and to obtain statements from your former employer, your treating physician and others who know how your condition impacts your ability to function. If you do exhaust your internal appeals, we may then file a lawsuit on your behalf in an effort to help you recover what you rightfully should.
Let Us Help You Get the Benefits You Deserve
Schedule a free confidential consultation about appealing your denial by calling us toll free at 1-866-438-8773. If you prefer, you can fill out our intake form, and an experienced lawyer will contact you to schedule an appointment.