1. You cannot buy more than 100% of income. Your employer LTD may or may not be taxable. An individual policy on top of that would be tax free. So you don't need to insure 100%, and insurers won't even let you buy that much. And at your income level, they might not even issue enough to make it worthwhile.While reviewing, I realized we may also have a gap in Long Term Disability I wanted to ask about as well.
Our employers each provide LTD that covers up to 60% of salary max, which we both have. That means that in the event of accident/illness that results in long term loss of income, we would be at less than full. On top of that there would be things like medical expenses that would make our typical expenses more than they are now.
There are three options I am aware of:What recommendations do folks have for addressing this gap in LTD?
- Add on a LTD policy to cover the 40% gap (plus some for medical?)
- Add riders to the Life Insurance policy for illness/disability, which would allow drawing against the death benefit (increase death benefit to cover potential draw down?).
Note: This makes me hesitant because an accident/illness that exists for a period but results in death would leave the survivor financially less than whole.- Do nothing additional for LTD beyond the employer covered.
Thank you again for the input so far and future.
2. Does not exist. There are riders on life policies that let you draw down for long term care, but not for disability. And they're only available on permanent policies, not term. The disability rider on a life policy just waives the premium if disabled and unable to work.
3. Doing nothing is probably best.
Statistics: Posted by Chardo — Sat Dec 07, 2024 7:35 am — Replies 11 — Views 1071