Volume 2, Number 4
Life, Disability and Long-Term Care Insurance News
IN THIS ISSUE...

  • WHAT’S THE DIFFERENCE BETWEEN DISABILITY AND LONG-TERM CARE INSURANCE?
  • HOW MUCH LIFE INSURANCE DO I NEED?
  • WHAT ARE THE TYPES OF DISABILITY INSURANCE AVAILABLE?
WHAT’S THE DIFFERENCE BETWEEN DISABILITY AND LONG-TERM CARE INSURANCE?
Long-term care insurance ( LTCi ) and disability insurance (DI) both help you protect your assets, but they serve different purposes.
 
Disability insurance  replaces a portion of your income lost due to an inability to perform your job. The qualifying disability may be job or task specific (unable to perform your particular job) or general (unable to perform any job).
 
Long-term care insurance  pays for a portion or all of the costs of caregiving needed due to physical or cognitive disability. LTCI will reimburse costs for care received at home or at assisted living or skilled nursing facilities. Policies may have a provision that a stipulated amount will be paid for any day that qualified care is required (Indemnity) or for any month during which qualified care is received (Cash).
HOW MUCH LIFE INSURANCE DO I NEED?
When purchasing life insurance, the question really isn’t how much you need, but how much capital your family will need at the time of your death, which depends on two variables:

1)   How much will be needed at death to meet immediate obligations?

This amount takes into account all final expenses: uncovered medical bills, funeral and estate-settling costs, outstanding debts, mortgage balance and college costs to name a few.

2)   How much future income is needed to sustain the household?

This is the number you’ll arrive at after calculating the “present value” of cash-flow streams your family will need after your death.

Use this calculator to determine how much life insurance you may need.
WHAT ARE THE TYPES OF DISABILITY INSURANCE AVAILABLE?
There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD):

1.      Short-Term Disability policies have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years.

2.      Long-Term Disability policies have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

Click here for an excellent article that explains the various features of these types of policies.
About Paul Cholak
Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the life, disability and long term care insurance needs of individuals and families of all ages.

We guide you through the steps of getting life, disability, long term care, and health insurance, and remain available to help you AFTER you've made your purchase decision.
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