Disability Insurance

**theworm**[$] · #1 04-24-2002, 11:42 AM

I have no idea where I should post this, so I'll leave it to the moderators to move it if necessary. I'm getting ready to start my new job. The company is very small, so it can not offer some of the benefits that I'm used to. They will, however, help with some of these benefits by way of payment. I am most concerned with disability insurance. I know that can be expensive, but it's something that I'm not comfortable going without. For those of you who are self-employed or who do not get disability coverage through your employers, I'd appreciate any information and advice on what to get, where to get it and what is should cost. I may be able to get my employer to cover part of the tab, but I need a good starting ground.
Thanks!

quasar · #2 04-24-2002, 12:59 PM

Hmmmm, it's very very difficult to get individual policy disability insurance. I'm not even sure anyone offers it. It's not one of those insurances most people feel unwilling to live without, so the market is low.

I suspect if you do find individual policy disability insurance it will be extremely expensive and not have the best terms.

I'd start by typing "individual policy disability insurance" into google. If you know whether you want short or long term or both, add those to the search.

Good luck!

Janice

phoenixx · #3 04-24-2002, 01:44 PM

Contact the National Association for the Self Employed (NASE) and ask who they recommend.

LEslie

**mjfrombuffalo**[$] · #4 04-24-2002, 03:22 PM

What state are you in? In some states, New York included, disability is mandatory for employers to pay.

mj

quasar · #5 04-24-2002, 03:43 PM

She's in Florida.

But even states that require certain types of insurance only require them from companies with a certain number of employees. For instance, companies with less than 30 employees (I think) don't even need to provide medical insurance (I think that one's national, but I'm digging way down into the recesses of my memory on this one).

Janice

**theworm**[$] · #6 04-24-2002, 03:58 PM

Thanks, everyone!
I've called an insurance broker for some quotes, and I'll call NASE as well.
Florida is known for it's terrible benefit. The law requires very little of employers. Everything is designed to protect the employer - not the employee. We have lovely beaches and nice winters, but lousy benefits. Don't try getting pregnant here - no required maternity leave - well, the law says you have to provide leave, but there is no pay. Not even reduced-pay dissability. Just as well - our schools are lousy. If you get pregnant you probably should move.
I've heard that long term dissability plans can cost about $2400/year. I'm hoping not!

quasar · #7 04-24-2002, 04:01 PM

Hopefully I'm wrong, but that actually sounds low to me.

My long term disability would have been more than that under COBRA and it was a group plan at 60% of salary payout (and I was working for a very large company that would have gotten very good rates).

Janice

frazzledspice · #8 04-24-2002, 04:28 PM

The mandatory insurance coverage NY is required to provide is for short term disability. It covers the same amount as unemployment insurance does (half salary with a relatively low salary threshold) for 26 weeks. Long term disability is optional everywhere.

Here in Arkansas, they don't even require short term disability. I was dumb enough to ask that question in a group of small businesspeople, and was looked at as if I were a pinko commie.

When we were a very young family, my husband got an individual long term disability policy (he has one in his job, too, but didn't at the time.) It covered $750 a month after a 30 day waiting period, tax free since we paid the premiums.

We kept those premiums up all these years (about $300 a year.) At the time he took that policy, we were both making about $750 a month (around 1971 or 1972 or so.) We have other disability policies now, but it's nice to have something that will always be ours at a low rate. True, we've probably paid $9000 over 30 years for it, but we could recoup that pretty quickly if he had a health catastrophe (which is more likely now that he's 54 instead of 24.)

**theworm**[$] · #9 04-24-2002, 04:54 PM

Quote:

Hopefully I'm wrong, but that actually sounds low to me. [

My long term disability would have been more than that under COBRA and it was a group plan at 60% of salary payout (and I was working for a very large company that would have gotten very good rates).

Yikes! I hope you're wrong too! I spoke with someone local who probably makes a LOT more than I do. He has dissability and life insurance for $600/quarter. I was hoping to get something for less!

Quote:

We kept those premiums up all these years (about $300 a year.) At the time he took that policy, we were both making about $750 a month (around 1971 or 1972 or so.) We have other disability policies now, but it's nice to have something that will always be ours at a low rate. True, we've probably paid $9000 over 30 years for it, but we could recoup that pretty quickly if he had a health catastrophe (which is more likely now that he's 54 instead of 24.)

That's a great rate. No chance of getting those premiums these days. You can't think of it in terms of what you've paid over the years. If you think of any insurance (dissability, life, car, homeowners) in those terms it will make you sick. Since we don't have kids, I'm not overly concerned with life insurance. I do have a very small policy through my husbands job - enough for his to get me in the ground and then some. We have savings so he wouldn't lose the house if I were gone (or vice versa) and we're comfortable with that. I worry though about becoming dissabled. If something horrific happened where I couldn't work and could possibly need expensive medical help, we could be financially ruined! I was hoping it wouldn't be thousands of dollars each year, but I need the peace of mind of a decent policy! I'll need to see what the quotes are when I start getting them back!

quasar · #10 04-24-2002, 05:05 PM

Actually that's a good point. It does depend on your salary.

Janice

theeye · #11 04-24-2002, 05:06 PM

I suspect Janice is right. Short term disability insurance is generally relatively inexpensive and where disability insurance coverage is mandated by law, it's nearly always the short-term variety.

Long term disability insurance is significantly more expensive. But it also depends on the sort you get. There are policies that consider you disabled only to the extent that you are incapable of working at all -- if you can flip a burger, you're able to work.

Then there are policies that will consider you disabled if you are unable to perform the duties of your particular field. That type of policy is significantly more expensive.

Policy premiums also vary significantly based on waiting period (you aren't covered at all for the first x months of disability) and compensation coverage (what percentage of your salary they will cover).

But, yes, $2400 sounds very low to me for a good long-term disability policy. That's why they're often foregone.

**theworm**[$] · #12 04-24-2002, 05:35 PM

Quote:

But, yes, $2400 sounds very low to me for a good long-term disability policy. That's why they're often foregone.

Oysh!!! This is quite distressing! I can take a longer waiting period - that doesn't concern me, but I don't want to be a burger flipper! Heck, I'm a vegitarian! How much does the french fry girl make an hour!?!!!!

theeye · #13 04-24-2002, 05:50 PM

Don't be distressed yet. Make an appointment with an insurance agent and ask them to price out some policies for you. Just be sure to be aware of the differences between a policy that covers you for your field of work and one that doesn't.

The cost will be adjustable by increasing the length of the waiting period or decreasing the amount of coverage that you elect.

**theworm**[$] · #14 04-24-2002, 06:03 PM

I already contacted 2 different agents this morning, so I'm hoping to have some valid quotes to compare within a few days. Guess I'll just have to wait and see what the cost is for the various options.

theeye · #15 04-24-2002, 06:04 PM

The other factor that affects cost is the length of time that the policy will provide benefits, e.g., until age 65 or until age 55 or for not more than 5 years, etc.

**hymie**[$] · #16 04-24-2002, 06:18 PM

Apparently all my relatives don't know that I have a private long-term disability policy through my life insurance company (Northwestern Mutual Life). I pay around $700 a year for it. I believe the benefit is around $2400 a month. I chose the longest period they had before it starts, six months, I think. The policy will consider me disabled if I can't do my job, not any job. I think it goes to 65. I can try to dig up actual details once I'm home.

theeye · #17 04-24-2002, 06:33 PM

$2400/month?

Nah, not worth disabling you for it.

I guess we should have another financial matters family conference.

**theworm**[$] · #18 04-26-2002, 05:27 PM

Quote:

Originally posted by hymie
Apparently all my relatives don't know that I have a private long-term disability policy through my life insurance company (Northwestern Mutual Life). I pay around $700 a year for it. I believe the benefit is around $2400 a month. I chose the longest period they had before it starts, six months, I think. The policy will consider me disabled if I can't do my job, not any job. I think it goes to 65. I can try to dig up actual details once I'm home.

Wow, Hy! Are you kidding. That's fabulous! (Yes, you and Eye should talk more). I would appreciate any info details you can dig up. I got some quotes, and it wasn't pretty. By reducing the benefit, and playing around with some options, I was able to get $3000 monthly (less any social security) after 6 months for $2150. I like $700 a lot more. Is this something that you bought when you were 3 to keep the premiums low? Please do let me know!
Thanks Big Brother!