What’s the Difference Between Long Term Care and Disability Insurance? 

Are Disability Insurance and Long Term Care Insurance the same? Do you need both?

Many people think Disability and Long Term Care Insurance are interchangeable, but in reality, they provide two very different benefits. Here we’re covering the differences between Long Term Care and Disability Insurance to better understand these coverages.

Fast Facts About Disability Insurance

  • Disability Insurance offers income replacement during your working years if you experience a debilitating accident or illness and are unable to work
  • Disability Insurance pays a percentage of your income when you are disabled
  • Benefits begin after a designated waiting period (or elimination period)
  • Short-Term Disability (STD): Benefits typically begin after a 1 to 8-day waiting period for an accident or illness and last for a specified number of weeks (typically a couple months)
  • Long-Term Disability (LTD): Benefits begin after a specified waiting period and may last until Social Security Normal Retirement Age
  • STD and LTD may be paid for by your employer or offered as voluntary benefits. Individual coverage is also available

Fast Facts About Long Term Care Insurance

  • Long Term Care (LTC) Insurance pays for home care, assisted living, and nursing home care services
  • LTC Insurance benefits are triggered when your doctor determines you can no longer do two out of six Activities of Daily Living (ADL’s) on your own
  • An elimination period must be satisfied before benefits are paid (typically 90 days)
  • Plans can be customized to pay a specific daily or monthly benefit for a specific duration (Ex: $4,500 per month for 3 years) and offer a range of inflation protection options and additional riders
  • Coverage may also pay for home modifications and devices to help you stay at home longer
  • LTC Insurance may be paid for by your employer or offered as a voluntary benefit. Individual coverage is also available

Why Both Coverages Are Important

Disability Insurance protects your income by replacing a percentage of your salary when you are disabled and unable to work. This helps pay your bills such as your mortgage, utilities, food, etc.

Long Term Care Insurance pays for long term care services in your home or a facility when you need care. This protects you from spending your hard-earned income or assets when you experience a long term care event.

Both Disability Insurance and Long Term Care Insurance are an important part of financial planning.

Do you have a plan to protect your income and assets from a long term care event? We can help. Try our free online LTCI quoting tool and get in touch with a LTC Specialist today.