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October 02, 2007

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Is that 3 in 10 for all workers? I'd be interested to see what the disability rates are for only white-collar jobs. More than likely it is nowhere close to 30%. Still a great idea to have this type of insurance though.

I really don't see disability insurance as necessary for myself with 1000+ hours of sick leave saved up, and with a white collar job that allows telecommuting if necessary, I don't see an issue.

Hmm, ever play football to not get hurt.. what happens? You get hurt then!

I know it's a good insurance but I would have to be in a life threating situation to keep me from working. I wonder how many of the 3 of 10 workers really can't work? When you think of all the people you know, how many of them really CAN'T work? I would guess it's closer to 1 in 10,000. However, I guess it would be worse for labor jobs.

I read every post you make about disability insurance, but you never suggest where to buy it??

Kaleb --

Hmmmm. Maybe that needs to be a post, huh?

I'm talking about this now with my financial advisor. I have some, but not enough disability (short and long term) through my employer.

However, as the sole bread winner for the house, I have other priorities to take care of should I be injured and not able to work for a while. I'm an hourly consultant and only get paid if I'm working.

Thanks for the reminder to follow up with them!

My previous employer had a ridiculously low insurance policy in this regard (like 10% income replacement) so I actually did go out and obtain it.

Here's the thing:

1) many of you have this as part of your employment package. Now, it's not portable if you are relying on your employer to pay the premium, but if your coverage is very good under it, the added expense might not be worth it. (I debate often whether to keep my policy now that I am with a company that has good coverage.)

2) it's not a replacement for an emergency fund. To make it affordable you are going to need a pretty lengthy waiting period before the insurance kicks in (90-180 days). So don't think it replaces your other strategies.

3) it's still not cheap. You are going to spend several thousand dollars if you want one that is inflation protected and that replaces a sizeable part of your income. It's definitely a hell of a lot cheaper than long term care and some other types of policies, though.

I was laid off with a 9 month severance package in early 2004. I has both short and long term disability through my employer which would have replaced 60% of my income in the event of a disability. I was diabled one month after I was laid off only to discover that my disability insurance was terminated when I went on severance and that it was not and could not be extended.

Tough lesson! Still waiting for SS disability to be approved.

As Adelle mentioned, some employers offer both short AND long term disability insurance - one large employer in my neck of the woods covers the long term for employees, but they have to pay for the short term. Most don't pay for it, but the problem with that mindset is that 3 months is a dang long time to go without income waiting for the long term benefits to kick in! They could end up selling plasma (or worse) to try to get through the 90 days, unless they have that emergency fund.
Jerry

What if you became unable to type? What if you had a permanent disability that meant that you couldn't work for long stretches of time?

There are lots of reasons why most people should have long term disability insurance. Short-term, its possible to self insure through sick leave and saving. As with all insurance, its necessity is a combination of how likely it is and what the effects would be. Losing your ability to do any job is relatively uncommon, but its effects on me (and I'm guessing lots of people) would be pretty catastrophic.

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