Knowing the different types of long-term disability insurance

On Behalf of | Dec 9, 2021 | Long-Term Disability Insurance

Due to an injury at work, an individual may suffer a long-term disability. The situation requires insurance that provides an income for the injured party. With insurance payments, the injured worker can continue paying bills, buying groceries and meeting other financial obligations in New Jersey.

There are multiple types of long-term disability policies. Understanding each will help you make better decisions.

Own-occupation disability insurance

The own-occupation policy gets applied only if a disability entails an inability to function in your occupation. For example, an injury prevents you from continuing to work in construction. The policy keeps paying out if you get a job at the local library.

Any-occupation disability insurance

Any-occupation disability insurance requires the injury to prevent you from working in any capacity. This is a sound policy to have, but it will be harder to get benefits. The policy obligates the injured to prove they cannot work at all. The any-occupation policy will save you money, but it creates greater obstacles for getting disability benefits.

Other considerations

You can get a policy where the insurer cannot cancel the policy as long as you manage premiums and payments responsibly. There is also a guaranteed renewable policy, which gives you the opportunity to renew with no impact on benefits and not have the policy canceled. However, the insurance company can raise premiums under certain conditions.

These policies have negotiable term limits. They can last 5-10 years. Others can last through to your retirement. You can also get a private long-term disability policy to supplement any employer-sponsored coverage.

Getting a long-term disability insurance policy requires thorough due diligence. Terms may cover specific medical conditions or other restrictions. No one can prepare for all eventualities, but you have to understand your options. Do your research before signing on the dotted line.