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JLeslie's avatar

Do you think it is best to have additional disability insurance or long term care insurance?

Asked by JLeslie (54557points) April 27th, 2012

My husband and I are discussing two different policies in the event, God forbid, something goes wrong with either us greatly affecting our health.

Background information: my husband is the only person working at this time, and we can afford our expenses, including being able to save. My husband, through his job, currently has long term disability insurance that would provide us with a percentage of his pay. We can live on the percentage, though it would be very tight, we would have to cut out extras like travel, and it does not include big spends like buying a new car if it came up, or a major house repair, but we do have savings for that. We are in our mid 40’s.

The two options:
His company is offering additional disability insurance, which at any time between age 60–70 can be converted to a long term care policy. The coverage would be for just him. It is portable from his company. If he changes jobs he can take it with him.

Independently I looked into a long term care policy, and for about the same amount of money we can get a policy covering both of us.

The big difference between the two is the extra disability gives you more cash in your hand to use as you wish, while the long term care would be spent directly for daily needs while disabled.

What are your opinions, and please state your reasoning.

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8 Answers

wundayatta's avatar

You’re still too young to worry about long term care insurance. Get the extra disability and revisit this in ten or fifteen years. Disabilities are more likely to allow you to remain home. Disabilities are more likely to last years.

Nursing home stays tend to last a year at the longest, and also usually end up being the last place you stay. If your long term care policy includes home care, that’s better and you might use it for longer, but pay attention to how long the benefits last.

The main purpose for these forms of insurance is to protect assets and income, usually so you can take care of dependents. If you don’t have any children to take care of, that reduces the need. There are also other ways to protect assets, I would think, such as creating separate accounts.

So bottom line, I’d lean towards more disability and hold off on the ltc for a while.

Charles's avatar

First of all, consider getting an independent, not work related, private long term disability insurance policy. If he is young (and mid 40s isn’t so young anymore – I got mine when I was in my mid 20s), it would be cheap and stay cheap. I did this through IEEE. I have my own personal disability insurance even though my employers have provided it to me. (You are something like nine (???) times more likely to become disabled than you are to die).

LTC insurance is a good thing to have if you have assets which would disqualify you from Medicare nursing home coverage. (Unless you play it wisely and gift away or “hide” your countable assets by, for example, putting all your assets into your primary residence which is exempt from Medicare countability).

JLeslie's avatar

The coverage for the insurance I looked into outside of the company would include at home care. It is up to six years of care, and can be split among the two of us in any way. If I use up 5 years, her would still have a year left for himself for example. But, what you bohth made me realize is I am not sure how long the long term insurance in his company’s policy lasts for if you need it. And, as I said it doesn’t cover me a all.

@wundayatta You made some interesting points I had not though of, thank you.

@Charles I had not thought to price out disability insurance separately. I’ll think about it. Thanks to you to.

Kardamom's avatar

Yes, because the odds of you or your husband becoming disabled (due to injury or illness) before you retire are much higher than the chance of either of you dying before you retire.

I can’t tell you how many friends and relatives I have that have had strokes, heart attacks, developed cancer, lost their eyesight, or got into a serious car accident in their 40’s and 50’s. : (

JLeslie's avatar

@Kardamom So which do you recommend? Are you saying the disability over the long term care? You said disabled is more likely than dying. Life insurance isn’t within the question.

Kardamom's avatar

I guess I misread the question, I thought you meant is it best to have both of those things instead of just regular health insurance. Because most people don’t opt to have either of these things because they don’t think that anything will ever happen to them. Wouldn’t disability care care be a part of long term care?

JLeslie's avatar

@Kardamom Usually a person is disabled when they collect on long term care coverage, but disability is different than the long term care. Disability is money to replace salary basically, and long term care pays for the services for care like an aide at home taking care of basic needs or a nurse’s visit, or if not at home pays for nursing home care.

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