Longterm disability

[MikeWaters]

what do you guys think of this?

I previously elected for a 180 day enrollment period with COLA, that will come to a rate of $0.827. To calculate the monthly premium you take your *monthly* salary, divide by 100, and then multiply times .827.

Is this a reasonable price for this? The benefit is 60% of your salary.

[creekster]

Originally Posted by MikeWaters

what do you guys think of this?

I previously elected for a 180 day enrollment period with COLA, that will come to a rate of $0.827. To calculate the monthly premium you take your *monthly* salary, divide by 100, and then multiply times .827.

Is this a reasonable price for this? The benefit is 60% of your salary.

If you do buy it, make sure you pay the premium with post-tax dollars which, at least as I am advised, menas the benefit will not be taxed, so 60% becomes very close to 100% (depending on what you do with the whole tithing thing).

[MikeWaters]

I think it is taken pre-tax, I don't have a choice.

[Mormon Red Death]

Originally Posted by MikeWaters

what do you guys think of this?

I previously elected for a 180 day enrollment period with COLA, that will come to a rate of $0.827. To calculate the monthly premium you take your *monthly* salary, divide by 100, and then multiply times .827.

Is this a reasonable price for this? The benefit is 60% of your salary.

You should only pay $2-3 a month

[MikeWaters]

Originally Posted by Mormon Red Death

You should only pay $2-3 a month

Based on me making minimum wage?

[SeattleUte]

Originally Posted by creekster

If you do buy it, make sure you pay the premium with post-tax dollars which, at least as I am advised, menas the benefit will not be taxed, so 60% becomes very close to 100% (depending on what you do with the whole tithing thing).

This is true, and we have an election, but I'm actually surprised at how many in my firm want to pay with pre-tax dollars. I think it has to do with age, nearness to retirement, savings, etc. I pay with post-tax dollars. It's not unusual to not give employees a choice and require pre-tax dollars.

[FMCoug]

Originally Posted by SeattleUte

This is true, and we have an election, but I'm actually surprised at how many in my firm want to pay with pre-tax dollars. I think it has to do with age, nearness to retirement, savings, etc. I pay with post-tax dollars. It's not unusual to not give employees a choice and require pre-tax dollars.

I'm pretty sure ours is mandatory pre-tax. Which is unfortunate because the 60% would go MUCH farther the other way.

[Mormon Red Death]

Originally Posted by MikeWaters

Based on me making minimum wage?

No ... long term disability generally cost about 2-3 a person

Here is some reading

A number of factors determine the cost of an individual disability income policy, including:

Age Younger persons pay less per year for a policy than those who are older and more likely to become disabled.

Benefit amount Policies that replace more of an individual's salary are more expensive. A policy that replaces 80 percent of your salary costs more than one that replaces only 60 percent of your salary.

Benefit period The shorter the benefit period, the less expensive the policy. For example, a policy with a two-year benefit period costs less than a policy that pays benefits to age 65, or the retirement age specified under Social Security.

Current health status Your health status determines whether you are eligible for standard rates or rates that are higher. A policy also may exclude from coverage any health conditions that exist before the policy is issued.

Definition of disability A policy that pays benefits if you are unable to perform the duties of your own occupation is more expensive than a policy that pays benefits if you are unable to perform the duties of any job for which you are reasonably qualified.

Discounts Many companies offer discounts for policies issued at the same time on more than one person, as well as when an employer (or association) collects the premiums for individual policies from employees and pays the insurer.

Extent of disability A policy that pays benefits only if the policyholder is totally and permanently disabled costs less than a policy that also pays benefits for a partial or temporary disability.

Gender Women usually pay more than men for an individual policy because claim costs are higher for women than men. Under a group policy, however, men and women typically pay the same rate.

Optional benefits For an extra premium, some policies offer additional benefits, such as cost-of-living increases or the option to purchase higher benefits in the future.

Smoker/tobacco use Most companies either give a discount to non-tobacco users or add a surcharge to the premium for tobacco use.

Type of job Expect to pay more for a policy that covers a high-risk occupation compared to a low-risk line of work.

Tips on Purchasing

Image of a man reading a book Examine how the policy defines a disability. Some policies pay benefits if you are unable to complete the duties of any occupation for which you are reasonably qualified by training, experience, and education. Others pay benefits if you are unable to perform the major duties of your own occupation. Some policies also pay benefits if you become ill or injured and are unable to earn a specified percentage of your income.

Ask for outlines of coverage so you can compare the features of several policies. Make sure you fully understand any policy you are considering-a policy that does not provide the protection you need is not a good buy. Features to look for in a policy include:

* Definition of disability (own occupation or any occupation; earnings test)
* Benefit amount
* Elimination period (waiting period before benefits begin)
* Length of benefit period
* Benefits for partial disability
* Replacement of lost income
* Return-to-work programs
* Recurrent disability (relapse provision)
* Cost-of-living adjustments or the right to purchase additional coverage
* Mental health/substance abuse provisions
* Noncancellable or guaranteed renewable
* Exclusions or other coverage limitations

Check that the company and agent are licensed in your state. If you have concerns, contact your state insurance department. An online resource for contact information is www.naic.org, the Web site for the National Association of Insurance Commissioners (NAIC), an organization of insurance regulators from each state.

Look for a company that is reputable and financially strong. Several services rate the financial strength of companies, and rating information can be obtained from your agent and public or business libraries.

Rating agencies include:

A.M. Best Company
www.ambest.com
or (908) 439-2200

Standard & Poor's Insurance Rating Services
www.standardandpoors.com

Duff & Phelps Inc.
www.insure.com

Moody's Investor Services
www.moodys.com or
(212) 553-0377

[danimal]

People in their 30s are much more likely to end up permanently disabled before 65 than dead before 65. We don't have it yet, but I think it's a wise investment. I have no idea about your plan, though.