CPA Jamie Block discussed the benefits of having long-term care disability insurance Monday on News 8 at Sunrise.
Block said while other forms of insurance are required by law, such as car and homeowners insurance, long-term disability insurance is voluntary. According to the Council for Disability Awareness, just over 1 in 4 of today’s 20 year olds will become disabled before they retire.
New York has a short-term disability option, but it only lasts for a maximum of 26 weeks. Once a seven day wait period is met, the benefits paid are 50 percent of the claimant’s average weekly wage capped at $170/week.
By comparison, long-term disability policies typically pay up to 60 percent of the person’s wages and are not capped. They also can pay benefits up to age 65. It is important to note these policies usually have a wait period. Generally, the longer the wait period, the cheaper the policy premium.
Block said there are different capacities when individuals can return to work. An “own-occupation” policy will pay so long as the individual cannot return to their present occupation. She offered the example of a surgeon who cannot perform surgery but can teach at the college. With an “own-occupation” policy, the benefits will continue to be paid even if they can teach. However, under the “any-occupation” policy the benefits will end once the person begins teaching.
You can always consult a CPA to learn more about long-term care disability insurance, or visit the New York State Society of CPAs website, click here.