Disability insurance and Long Term Care insurance are two very important types of coverage that you can buy. Unfortunately, there is a great deal of confusion that exists about what each of these types of insurance policies will cover, and one is commonly mistaken for the other. By knowing the difference between the two, you will be able to make a better, more educated and appropriate decision regarding your own insurance protection.
Disability Insurance is a product that will pay you a regular monthly benefit in the event that you are injured and unable to perform the regular functions of your current occupation. Once you are injured, the insurance company will begin sending your benefit amount every month until you are either well enough to return to work, or you have exhausted your benefit pool.
Long Term Care insurance is a product that will pay for your nursing home expenses if you are ever required to stay in such a facility. Benefits are paid out in daily or monthly increments up to the pre-defined limits chosen by the policy owner at the time of issue. The installments will continue for as long as the insured person remains in the nursing home, or until the benefit pool has been completely exhausted.
If you are trying to decide whether to purchase Disability Insurance or Long Term Care Insurance, your age and occupation should be the primary factors to consider. As you get older, your chances of becoming disabled and unable to perform the functions of your current job become less likely, whereas your chances of requiring professional care in a nursing home increase significantly. Additionally, if your job is more physically demanding or requires the use of heavy machines and equipment, your chances of experiencing a disabling injury are higher.
By purchasing Disability Insurance or Long Term Care Insurance, you are protecting your income, assets and lifestyle. A severe injury that inhibits your ability to continuing working can be devastating to your financial security. A properly arranged Disability Insurance policy can be the difference between a few months out of work and complete economical disaster. If you need the professional care of a nursing home, the actual cost of such treatment can be in the hundreds of thousands of dollars. Without Long Term Care Insurance, the nursing home bills will consume all of your life savings, and there is even the possibility that your estate could be at risk as well.
The most efficient and logical way to begin your investigation of Disability Insurance and Long Term Care Insurance is to contact a qualified insurance broker or financial planner. These industry professionals will help you evaluate which of these two types of insurance policies is most appropriate for your given situation, and then help you to formulate a policy that is customized to your specific needs and financial capabilities. Once an analysis has been completed, your advisor will help you to research quotes from multiple insurance carriers for similar products so you can make an educated and informed decision regarding which insurance company has the best plan for you.
Certain similarities exist between Disability Insurance and Long Term Care Insurance policies. There are three basic points that both types of policies share, and these are the points that should be considered when evaluating policies from different insurance carriers. The first point is the Elimination Period. This is the length of time that must pass after you are eligible to begin receiving the monthly benefits before payment actually commences. The second point is the Benefit Amount. This is the actual dollar amount of the monthly payment that comes to you once the installments have begun. The last point is the Benefit Period. This is the length of time that installments will continue to be paid to you until your total benefit pool is exhausted.