Important Tips to Consider When Buying Long-Term Liability Insurance


In certain organizations, the employees’ benefits package may include long-term disability coverage. The plan for financing may vary, whereby in some the employer may take up the whole payment while in other parts of the premiums are deducted from the employee’s pay. However, in other cases, certain may fail completely to include these plans in their benefits package.

When this happens, it does not mean that the story ends there. You still can go ahead and choose to purchase the plan for yourself. The insurance coverage is meant to benefit you and cater to your financial needs in the event you experience a medical condition that limits your ability to perform your work. As such, the fact that your employer does not provide the coverage does not mean you shouldn’t have one. This being the case, this article aims at providing you with tips on things to look out for when purchasing your own plan.

Why You Need a Long-Term Disability Insurance

Before you even go to learn about the terms of various insurance companies, it is important to determine a suitable plan for yourself. This is because there are various aspects you need to consider before arriving at a suitable plan for yourself. Among these factors include your financial capabilities and also the period you want to be covered. When it comes to short-term disability insurance, the period of coverage extends up-to one year.

This, in turn, means that its premiums are also cheaper compared to the long-term disability insurance. However, on the other hand, the period of coverage for long-term disability insurance may extend for periods between five to ten years. Therefore, if you are not a little tight on the budget, it is more advisable for you to purchase a long-term disability plan. The idea is that offers you more financial protection for a longer period of time.

Determining the Right Insurance Company for You

One thing you have to be wary about long-term disability insurance is that there is a risk of your benefit claim being rejected. As such, it is important to choose the insurance company wisely depending on the terms and conditions of their policies. Therefore, the insurance company you select should be able to clarify the following issues for you:

  • What makes up a legitimate claim for them?

In terms of denial of claims, the administrator may deny you benefits for legitimate or illegitimate reasons. Therefore, the point you want to be clarified is what qualifies for long term disability under their respective policies. Getting an answer to this question will help you determine whether the policy is right for you.

  • What is their specific waiting period?

In certain cases, the waiting period for claims filed under the long-term disability plan may extend to three months or more. As such, it is important to understand how this period varies for each of the insurance companies you evaluate. This factor may also influence the premiums you will have to pay.

  • The definition offered for your coverage

For the long-term disability insurance, your plan can either be defined as either an “own-occupation” policy or “any-occupation policy”. Under the “own-occupation” policy, you will only be entitled to your benefits if you cannot mentally or physically fulfill your duties. Under the “any occupation” policy, you are entitled to benefits you will only be entitled to the benefits if you cannot fully perform tasks associated with your skill, experience or training.

In summary, this article emphasizes the importance of purchasing your own long-term disability insurance if your employer does not provide one. However, while making the decision on which insurance company to obtain your plan from, it is important to understand their policy terms.

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