Is long-term disability insurance worth the expense?

Like many California residents, you may have experienced an increase in your living costs over the last few years, especially in medical expenses. Even if your employer pays for a portion of your health insurance, chances are you have seen an increase in premiums recently. In many cases, this is because employers are pushing health care and insurance costs back to their employees when possible. This also means fewer employers are offering insurance benefits such as long-term disability. However, even if you do not get long-term disability insurance in your employee benefits package, it may be worth the expense to pay for it yourself.

According to a report from National Public Radio, most long-term disability insurance policies pay a portion of your income if injury or illness precludes you from working for a significant amount of time. Statistics show that about 25% of people become disabled before the standard retirement age of 67. With a long-term disability policy, you may be able to receive about half of your standard income from the policy during the time you are unable to work.

If your employer provides long-term disability insurance, it may give you peace of mind to know you have coverage if you become injured or ill. However, if this insurance is not part of your benefits, you may want to consider paying for a policy yourself. Even if you have to cover the premiums with post-tax dollars, the potential benefits if you become ill may make the extra cost worth it. Additionally, paying for the policy with post-tax funds creates an additional benefit: the income you receive if you make a claim is usually tax-free.

This general information on long-term disability insurance is intended to educate and should not be interpreted as legal advice.

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