Gary S. Williams//Special to The Daily Record//September 5, 2012
//Special to The Daily Record
//September 5, 2012
Disability insurance addresses lost wages that stem from an inability to work. Long-term care insurance, in contrast, addresses expenses associated with medical care provided to you in your home, a nursing home, a rehabilitation center or an assisted living facility.
Disability insurance policies may address either short-term or long-term needs for income.
Short-term disability policies provide coverage on a temporary basis, usually up to several months, while you recover from an accident or illness.
Long-term disability insurance provides benefits when a disability is of a more permanent nature. Most long-term disability policies will cover you throughout your working years, usually until you reach age 65. Policies vary considerably in terms of the cost of premiums, the percentage of your prior salary paid out as a benefit and the definition of what constitutes a disability.
Long-term care insurance is designed to help cover costs of health care services provided to you in your home, a nursing home, a rehabilitation center or an assisted living facility. Many long-term care insurance policies provide benefits when you require assistance with activities of daily living such as bathing, dressing and feeding yourself. Loss of wages typically is not an issue with this type of coverage.
Long-term care insurance can be purchased at any time in your life. However, premiums tend to rise considerably with age, and applicants can be turned down due to pre-existing medical conditions. Although individuals of any age may receive benefits from a long-term care insurance policy, these policies typically are intended to help finance the medical costs of the aged.
Why do many financial experts recommend their clients purchase both disability and long-term care insurance?
-According to the Social Security Administration, a 20-something worker today has a 30 percent chance of becoming seriously disabled before reaching retirement.
-The average daily charge for a semi-private room at a nursing home is $225. The average monthly charge for care in an assisted living facility is $3,293.
For more information on disability and long-term care insurance, visit the Insurance Information Institute Web site at www.iii.org or talk to your financial or insurance professional.
Gary S. Williams, CFP, CRPC, AIF, is president of Williams Asset Management at 8850 Columbia 100 Parkway, Columbia, Md. He is an investment adviser representative with/and offers securities and advisory services through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 410-740-0220 or [email protected]. This communication is strictly intended for individuals residing in the states of: Arkansas, California, Colorado, Delaware, Florida, Kansas, Massachusetts, Maryland, Maine, Michigan, Missouri, North Carolina, New Jersey, New York, Ohio, Pennsylvania, Utah, Virginia, Wisconsin and West Virginia. No offers may be made or accepted from any resident outside these states due to various state requirements and registration requirements regarding investment products and services.