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Choosing between long-term care and long-term disability coverage

Did you know that according to the American Journal of Public Health, two-thirds of all bankruptcy filings are at least partially caused by medical problems? It causes huge financial distress because of the high cost of care, as well as the missed work due to injuries or illnesses.

Differences: LT Care Insurance vs. LT Disability Insurance

Insurance is essential. It protects you and your loved ones. But what makes them different? How do you know what you need?

Long-term disability insurance can help people when they must miss significant time at work due to health problems.

It is quite easy to confuse long-term care insurance with long-term disability insurance.

There are several similarities but there are also key differences:

  • Long-term care insurance (LTC) is a type of insurance that people need to consider. It covers the cost of nursing homes, in-home care, and even assisted living facilities when a person cannot take care of themselves. These facilities can be very expensive and expenses can pile up quickly. It will pay for the care facilities and other services you may be entitled to.
  • Long-term disability insurance (LTD) often replaces a portion of income that you can lose if you’re unable to work because of your injury or illness. So, this type of insurance will pay back some of that lost income.

When Do You Need Insurance?

Many clients ask: “When should I start thinking about these different types of insurance programs?”

Long-term disability insurance should be thought about as soon as you earn a full-time income.

Here are some questions that you should ask yourself when you decide whether or not to purchase long-term disability insurance:

  • Do you have dependents that rely on your income?
  • Do you have a debt that you will have to pay even if you’re disabled?
  • Do you have a high-paying occupation?
  • Do you have an occupation that requires skills that you cannot do with injuries and illnesses?

Long-term care insurance isn’t a necessity at a young age. The American Association for long-term care insurance states that 4.5 percent of long-term claims were for people under 70. People at least 81 years old started over two-thirds of the claims.

But, on the other hand, you don’t want to wait too long to purchase long-term care insurance either. You want to have it in place to prepare for the future but you are likely not going to need it until you are at least 80 years old.

You will qualify for these benefits when you cannot engage in the daily activities that living on your own requires. These activities include dressing, walking, eating, bathing, and using the bathroom on your own.

LTC & LTD Benefits

These types of insurance allow policyholders to decide when the policy will pay out benefits. It breaks down to a simple standard: the longer the benefit period lasts, the larger the premium will be.

These insurance policies also have elimination periods, also called waiting periods. This describes the time between when you actually need the benefits and when the first payment was made. The shorter the time of your waiting period, the more your policy will cost.

DarrasLaw is Americas' most honored and decorated disability litigation firm in the country. Mr. Darras has seen more, evaluated more, litigated more, and resolved more individual and group long term disability and long-term care cases than any other lawyer in the United States.

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