Disability Insurance

[winchman]

Hi Guys,

Just wandering if any of you have puchased any long or, short-term disability insurance. If so, what type of policy, with what carrier? cost? pros and cons? I'm considering this for various reasons. My father was diagnosed with Parkinsons Disease at the young age of 52 and over the past six years I have watched this terrible disease progress. He had to quit working. Fortunately, years ago he was able to purchase a long term disability insurance through the company that he worked for. It has been a huge help to my parents well being. My wife is staying at home until the kids are in school, so I am our only income. Just thought it might be wise to purchase something while I'm young to protect my family from the unforeseen. Any input would be appreciated.

Thanks,
winchman

 

[Knight9]

Winchman,

I'm in Canada so my situation is going to be a lot different than yours. I'm self-employed and my wife too stays home with the kids. She will be at home for at least another 3 years and I've been contracting now for about 6. I immediately purchased disability insurance. There are two things to consider in our area anyway... (1) disability income is tax free, so you only have to purchase enough to be equivalent to the net income you make. (2) I think it is smart to purchase future earnings riders on the policy. This allows me to purchase more disability insurance as my earnings increase. If you don't purchase this option around here you are stuck at your entry level unless you want to purchase a 2nd policy (much more expensive).

Disability insurance is not cheap. But the options are a lot worse! I'm pretty sure we could live ok on the amount we would get if I'm ever disabled.

Obviously these "facts" are potentially only relevant in Alberta/Canada /w3tcompact/icons/crazy.gif but it might give you an idea of some things to keep in mind.

Kevin

 

[TerryinMD]

WM,

I was told by my financial advisor to buy as much short/long term disability insurance as you can. Especially the older you get!! As far as he was concerned, it's a cheap way to protect your income and your family.

Terry

 

[snowman]

I think it's a good idea.
Two events made me buy some years ago - one was a guy I worked with, about 40 years old, had a brain aneurysm (sp) and was unable to work after that (has zero short term memory); second was my uncle in his late 50's - had various surgeries and medical problems that made him unable to work.

Both had DBL insurance.

You want to make sure that your insurance makes your disability as specific as possible; if it's too broad, they can argue that you can go back to work.

The proceeds are non-taxable to the extent that you paid for the insurance. If it is employer provided insurance, it will be taxable.

 

[MDNY]

I have both and I can tell you it is the plan I hope to never need. But if I do I am covered and then some. You can replace just about everything in life except your health and your income if you can't work.

 

[dmccarty]

Winchman,

About 10 years ago I looked into buying disability insurance
since I was not covered by my company at the time. I cant'
remember the amounts of coverage or cost but it was expensive
for the first couple of years. The policy was written so that you
paid a high premium for a few years and then, if you had not used
the policy, the premium amount dropped quite a bit. There was
also a payback as well where you actually got your part of what you
paid in premiums after a few years.

<A target="_blank" HREF=http://www.fool.com>http://www.fool.com</A> might have some information on getting
disability insurance.

I think disability insurance, especially if you have kids, is a must
have. But shop around....

Hope this helps...
Dan McCarty