Every worker faces the risk of becoming disabled and needing years of an alternate source of income. Millions of workers have benefited from receiving disability income insurance. The first step is to know how much a long-term disability policy in New Jersey will cost.
Coverage for long-term benefits
Private long-term disability insurance covers your living expenses for a disability that is expected to last for many years. A recipient chooses the benefit period that lasts for 5, 10 or 20 years or the age at which retirement begins.
In many cases, a short-term disability policy starts for several weeks before the long-term starts. Your new payments are paid out on a small percentage of your annual income. The amounts vary based on the duration of the benefit period, the recipient’s age, occupation and other details.
The basics of premiums
The premium of your insurance policy varies from $25 to $500. An individual policy is often not taxed while a group policy, provided by your employer, is taxable.
There are certain factors that will increase your premium rates. An older applicant with one or more underlying health conditions will face higher costs. Younger, healthier recipients will pay less. In addition, workers employed in hazardous jobs typically have to pay more for coverage.
Determining your costs
The average costs of private long-term disability plans vary. The amount of income you’ve earned is the most important factor that determines your payments. Most people who are planning for long-term disability insurance want to know what they’re owed from the beginning.