Very often, people have a tendency to get confused about this subject. When people are inquired how they plan to protect their resources and income in case of a long term treatment situation, almost every time answer is the same; “Well I have a disability insurance… ”
Confusion starts with the associated with Disability Insurance where people get Short Term Disability and Long Term Impairment confused with Long Term Care. There is a distinct difference between the two insurance plans and in order to have a better understanding of the difference, we need to know what each insurance plan vehicle offers as protection.
We’ll start explaining what Disability Insurance plan offers without going into too much detail as in Long Term or Short Term Impairment: In a nut shell, Disability insurance provides a portion of your income for a specific period of time when you are disabled while you are employed. What this means is when you get disabled, you may receive up to 40, 60 or maybe 80 percent of your total earnings for a specific period of time. Further more, this actually also means two things:
(1) You are not going to receive any supplemental income for the cost of your care throughout your disability insurance; all you are going to get is the portion of your income.
(2) You might receive a portion of your income for a specific period of time. When this period is over, your income from your disability insurance will catch.
So you can actually see that the benefits of Impairment Insurance are very specific and limited.
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Nevertheless this simply doesn’t imply that Disability Insurance is not a valuable security plan. When you learn the benefits of Long Term Care Insurance, you should be able to understand that the two protection plans take separate and important precedence in our lifestyles.
Before we get into the benefits of Long Term Care Insurance, we need to clear out one misconception about this insurance plan; Long Term Treatment Insurance is not necessarily some insurance plan that you purchase to get care if you are older, and it is not particularly a nursing home care either. Individuals get into Long Term Care situation within younger ages too and Long Term Care Insurance is a great protection plan that provides many valuable benefits.
Amongst many of these benefits, of course the most important you are to provide funds for your care if you are unable to do some of your daily activities. This is actually the main difference between this plan and the Disability Insurance; Long Term Care Insurance plan does not provide income or any portion of your income, it actually pays for the price of your care up to certain amount that is determined within your policy. In other words, Disability Insurance provides you a portion of your income where Long Term Care Insurance really pays for the cost of your care. You can now see the importance and the complimentary character of the two insurance plans; while you are receiving a portion of your income through your Disability Insurance – which is always less than your own regular income, you will also have your own Long Term Care Insurance paying for the price of the care that you are receiving.
Considering the present high cost of care, plus having to pay for it with a limited revenue may become an enormous financial burden. This really is one of the most important reasons why these two insurance policies exist. It is also as important plus highly recommended that you should consult an insurance broker who can coordinate and design these policies according to your specific personal needs for your full protection.