Disability and Long Term Care (LTC) insurance are sometimes confused with one another. Here are the basic definitions of each and the differences:
Disability coverage helps replace a portion of your salary for a set period of time in the event that you cannot work due to a qualifying illness or injury. A cash payment is received to compensate for lost wages when the injury/ sickness has been declared under a legally qualified physician’s care.
Long-term care (LTC) needs typically arise as part of the normal aging process, but can also be due to an injury or illness or chronic condition. Long term care insurance helps protect your assets and gives you more choice and control when you need long term care.
I personally had a Disability Policy for almost 16 years. Considered dropping it after our children were finished with college but decided to keep it in force. That decision was crucial when at 55 years old I had serious open heart surgery and was unable to continue working as before and maintain my level of income.
The tax-free benefits I received for 10 years enabled my wife and I to keep our house. In the next 4 years, all our children got married and started blessing us with our first grandchildren. Without disability benefits, our support for our children and grandchildren would have been drastically different.