When an individual is considering disability insurance, he/she can choose to purchase long term disability insurance or short term disability insurance. In general, short term disability insurance is more affordable, however, as its name implies, it will only cover an individual for a short duration of time. The exact time will depend upon the plan that an individual purchase.
Long term disability insurance, on the other hand, will provide individuals with financial assistance for an extended period of time. Long term disability insurance may be a wise investment, as statistics indicate that one out of every five individuals will suffer from a long term disability. These statistics also illustrate that, on average, an individual who is suffering from a long term disability will remain out of work for more than 2.5 years.
If a long term disability prohibits an individual from working for an extended period of time, he/she will not be obtaining the income necessary to purchase vital necessities and pay his/her bills. Long term disability insurance can help to ensure that an individual continues receiving an income, if he/she is not working due to a disability. The exact stipulations of a policy will vary significantly from one insurance company to another.
In general, an individual who purchases long term disability insurance will receive payments that equate to at least 50 percent of his/her regular salary, though it may be more with some companies. He/she will be permitted to continue receiving these benefits for a period of 2-5 years. In most instances, an individual will not be able to claim his/her insurance benefits if he/she has reached the aged of 65. The cost of a long term disability insurance plan also varies greatly. An individual should expect to pay over $200 each month for this type of insurance, however, policies with some insurance companies cost much more.