Many people are unfamiliar with disability insurance of any kind, including private disability insurance and long-term disability insurance that’s typically offered by employers. Although the acronym LTD might seem familiar because it’s found on pay stubs, most workers do not fully understand what it means, even when they have chosen long-term disability during the benefits open enrollment process at work. LTD is a deduction that occurs each pay period as either a voluntary or employer-paid benefit.
Long-term disability is used to provide you with income during an illness or injury that prevents you from working for an extended period of time. It’s a benefit that would be available when an employee is stricken with a debilitating illness like cancer. Many employers offer long-term disability insurance to their employees, sometimes for a small cost each pay period.
There are a lot of employees who choose not to take advantage of long-term disability insurance offered by their employer. In some instances, it’s because they have chosen another option, such as private disability insurance El Cajon CA. The law allows employees to have more than one type of disability insurance. Employees who take time to think about the benefit versus the cost usually realize the wisdom behind selecting disability insurance. The benefits far outweigh the costs.
The Increasing Decline In Disability Insurance
Unfortunately, in recent years the number of employees who choose disability insurance has steadily declined. Subsequently, many workers find themselves in a situation where they experience serious illness or injury and it significantly impacts their ability to care for themselves. It seems as though any topic even remotely related to healthcare and insurance is complicated these days, so there’s a tendency to set disability insurance aside.
For a period of time, issues surrounding the Affordable Care Act caused some confusion as to how it would affect disability insurance. While those concerns may have been resolved, it didn’t increase the number of people who opt for disability insurance, despite its importance. Although disability insurance is voluntary, it can be just as important as regular healthcare insurance. Beyond the fact that many employees do not fully consider the value of disability insurance, there’s the issue of wanting to reduce the number of deductions from their paycheck by eliminating anything that’s voluntary.
In years past, employers would almost always pay for the full cost of disability insurance, but that’s no longer the case for a lot of workers. Even when employers pay for disability insurance, some employees are not fully aware of what the benefit means and how it’s of value to them if it ever becomes necessary.
There’s also the issue of the economy and wages as they relate to the cost of living and being able to afford the basic necessities of life. When people make more money, they are more likely to purchase disability insurance because it doesn’t interfere with their ability to afford the cost of living. When there’s a question of whether a person can afford to put food on the table, then there’s a tendency to mitigate the issue by eliminating any additional expenses, like disability insurance.