Читать книгу Personal Finance After 50 For Dummies - Eric Tyson - Страница 45

Unless you’re already financially independent, you need long-term disability insurance during your working years. Generally speaking, you should have LTD coverage that provides a benefit of approximately 60 percent of your gross income. Because disability benefits payments are tax-free if you pay the premium for disability insurance you buy, they should replace your current after-tax earnings.

If you earn a high income and spend far less than that, you may be fine purchasing a monthly benefit amount that’s less than 60 percent of your income.

We recommend that your disability policy contain the following:

 An “own occupation” definition of disability: This definition allows you to collect benefits if you can’t perform your regular occupation. For example, if you work as an accountant, your disability policy shouldn’t require you to take a job as a retail worker if you no longer can perform the duties of an accountant.

 A noncancelable and guaranteed renewable clause: This clause guarantees that your policy can’t be canceled if you develop health problems. If you purchase a policy that requires periodic physical exams, you could lose your coverage when you’re most likely to need it.

 A financially appropriate benefit period: Obtain a policy that pays benefits until an age at which you would become financially self-sufficient. For most people, that would require obtaining a policy that pays benefits to age 65 or 67 (when full Social Security retirement benefits begin).If you’re close to being financially independent and expect to accomplish that or retire before your mid-60s, consider a policy that pays benefits for five years.

 A high deductible/waiting period: The waiting period is the “deductible” on disability insurance. It’s the time between your disability and when you can begin collecting benefits. We recommend that you take the longest waiting period that your financial circumstances allow, because doing so will greatly reduce your policy’s premiums. We generally recommend a waiting period of at least 90 or 180 days.

 Residual benefits: This feature pays you a partial benefit if you have a disability that prevents you from working full time.

 Cost-of-living adjustments: This provision automatically increases your benefit payment after you’re disabled by a set percentage or in step with inflation.