Frequently, people have a tendency to get confused about this subject. When people are asked how they plan to protect their property and income in case of a long term treatment situation, almost every time answer is the same; “Well I have a disability insurance policy… ”
Confusion starts with the definition of Disability Insurance where people obtain Short Term Disability and Long Term Disability confused with Long Term Care. There exists a distinct difference between the two insurance policies and in order to have a better understanding of the difference, we need to know what each insurance vehicle offers as protection.
We’re going start explaining what Disability Insurance plan offers without going into too much details as in Long Term or Short Term Impairment: In a nut shell, Disability insurance policy provides a portion of your income for a specific period of time when you are disabled while you are employed. What this means is when you get disabled, you may receive up to 40, 60 or possibly 80 percent of your total revenue for a specific period of time. Further more, this actually also means two things:
(1) You are not going to receive any supplemental income for the cost of your care throughout your disability insurance; all you are going to obtain is the portion of your income.
(2) You are going to receive a portion of your income for a particular period of time. When this period is over, your earnings from your disability insurance will seize.
So you can actually see that the benefits of Disability Insurance are very specific and restricted. Nevertheless this simply doesn’t imply that Disability Insurance is not a valuable protection plan. When you learn the benefits of Long Term Care Insurance, you should be able to understand that the two protection plans take individual and important precedence in our life.
Before we get into the benefits of Long-term Care Insurance, we need to clear out one misconception about this insurance plan; Long Term Care Insurance is not necessarily some insurance policy that you purchase to get care when you are older, and it is not particularly the nursing home care either. Individuals get into Long Term Care situation within younger ages too and Long Term Care Insurance is a great protection program that provides many valuable benefits.
Amongst many of these benefits, of course the most important the first is to provide funds for your care when you are unable to do some of your daily activities. This is actually the main difference between this plan and the Disability Insurance; Long Term Care Insurance plan does not provide income or any portion of your income, it actually pays for the cost of your care up to certain amount which is determined within your policy. In other words, Impairment Insurance provides you a portion of your income where Long Term Care Insurance actually pays for the cost of your care. Now you can see the importance and the complimentary character of the two insurance plans; while you are getting a portion of your income through your Disability Insurance – which is always less than your own regular income, you will also have your own Long Term Care Insurance paying for the expense of the care that you are receiving.
Taking into consideration the present high cost of care, plus having to pay for it with a limited income may become an enormous financial burden. This really is one of the most important reasons why these two insurance policies exist. It is also as important and highly recommended that you should consult an insurance broker who can coordinate and design these types of policies according to your specific personal needs for your full protection.
Remember, you should protect the most important asset in your life: Your Earning Power!
Gurhan Gary Demirkan is a member of eSuremenow.
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