How does LTD work ? What do you do ? (employee, consulting, average)

[sasha77]

I have been reading and thinking about buying private Long term disability.

I have good LTD (50% employer provided+20% supplemental selfpay for permium) coverage through my employer, but as one knows that can go anytime- either through a layoff or through employer dropping coverage.

I am thnking of just moving myself out of the employer provided insurance and not being tied to the employer. I have no intention of leaving but by nature am a pessimist

So here is the problem: every time I look for LTD online, they say that I can buy coverage for up to 60% of annual pay, minus the employer provided coverage. Even if I drop my supplemental 20% and opt for only employer provided, that is still only 10% individual LTD coverage)

I just found out from my employer that I CANNOT decline LTD coverage, nor is it portable. This seems a little odd to me. The employer coverage appears to be restricting my ability to get LTD coverage for my later years, where it may be crucial to my family's finances. If for some reason I were to lost that coverage a few years down the road, I may be unable to get a LTD policy, where as now I can for a reasonable amount....

I am a single parent so this is vital. I dont know about, nor understand the ins and outs of SSI etc., straightforward LTD insurance, to protect what is super important for my family's well-being seems most logical

I want to just pay out of pocket and have peace of mind. have i misunderstood the way this works ?

[Hemlock140]

Whether you keep it or not, if your employer offers it, a private provider will deduct the amount the employer would have covered from what they pay you.
Insurance companies always try to get someone else to pay as much of possible of the claims. Private LTD was meant for the self employed, so while it's available to people with regular jobs, for them (you) it's meant as a supplement. When I had a business I had LTD that paid 100% of my average income for the last 12 month period, plus and additional amount to cover hiring an additional employee to cover the work I would be unable to do. I would just keep the company plan. If you get laid off you will be on unemployment, not disability.

In your later years what you will need to get is Long Term Care insurance, that will prevent your children from having to pay for your nursing home care.

[sasha77]

I read through my post, it sounds like I want to use my LTD for unemployment. That is not quite right.

I am concerned about becoming disabled when I am out of work, or ending up having to consult, at which point I will have to buy LTD out on my own. Being older will not make it easier for me. I would rather get it now and if nothing happens FANTASTIC I have my health, but if I end up in the other situation, at least I will be covered.

Anyway, I am not sure what you mean by "if your employer offers it, a private provider will deduct the amount the employer would have covered from what they pay you."
Of course if I make a claim, my private LTD will cover after my employer pays. I am talking about wanting to BUY LTD for as much % as is allowed by law, by declining my employer provided coverage. It makes sense to me since I know there is a distinct possibility of consulting on my own later years.
I want to protect at least my current income.

[charlygal]

You can still buy it. While you are employed, it will be "minus your employer coverage." Should you wind up unemployed, maybe you can increase the percentage. Ask the insurance company about that.

Being employed is not hindering the percentage of coverage. That policy is from the insurance company. If you want more than 60% coverage, comparison shop around to different LTD providers. Although from Wikipedia, it looks like a "high percentage" is only 65% http://en.wikipedia.org/wiki/Disability_insurance