Young people generally don’t think of themselves as becoming disabled, but accidents, illnesses, and injuries don’t discriminate by age. Anyone can suffer a long-term disability at any time, which is why having a Long Term Disability (LTD) plan is so important.
If you are no longer able to work, how will you support yourself? If you are married or have children, how will you support them? The company you work for may have an LTD plan in place, but it may not be enough. Often, employer plans cover a limited portion of your salary and may not factor in bonuses that you rely on to pay your bills.
The time to worry about how you will pay your bills if you become disabled isn’t after you become disabled. It’s now. Simply put, if you have a job, you most likely need disability insurance. Consider this:
- Over 40 million Americans are disabled.1
- The average individual disability claim lasts 31.6 months.2
- More than 1 in 4 of today’s 20-year-olds will be out of work for at least a year due to a disability before they reach retirement age.3
How can an LTD plan help?
An LTD plan is designed to help you financially. If you suddenly become disabled and are no longer able to work to support yourself or family, your LTD coverage can help. The plan can help you pay medical co-pays, mortgage, rent, credit card bills, utilities, loans, and other everyday expenses.
So how do you choose the right plan? You should consider a plan that provides flexibility with options that best suit your needs, including:
- Total and Partial Disability options
- Coverage you can take with you, even if you change jobs
- A "your occupation" definition of disability, so you won't be forced into another line of work
- Wider range of benefits amounts
- Income tax-free benefits (because you pay the premiums with after-tax dollars)
- Choice of waiting periods
- Rehabilitation program
- Benefits until your disability ends (if you're disabled before age 50)
Hopefully, you will never have to reap the benefits of a long-term disability plan, but if you do, you’ll be glad you have one. Your life can change forever in the blink of an eye. Being prepared can make all the difference in the world.
Visit cpai.com/LTD to learn more about what options are available to AICPA members.
1. 2017 American Community Survey. Total civilian noninstitutionalized population with a disability in the United States.
2. Council for Disability Awareness, Disability Statistics, March 2018.
3. Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 1997, Table A, October 2017.
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