Statistics

• Twenty-year-olds have a 3-in-10 chance of a disability before retirement.raserei image by hapa7 from Fotolia.com
  
  Cornell University reports that in 2008, over 12 percent of individuals in the United States reported a disability. About 17 percent of Americans have some sort of disability. A 20-year-old worker has a 3-in-10 chance of becoming disabled before retirement. At least 70 percent of people over 65 will need some type of long-term care help during their lifetime. This number may grow as the number of persons over age 85 is expected to triple by 2040.
  
  

Types

• Some long-term care insurances only cover nursing home care.nursing duties image by Pix by Marti from Fotolia.com
  
  Disability coverage policies may only cover a total disability while others will cover a partial disability or inability to work in your field. Also, coverages will sometimes pay residual benefits while returning to a normal work schedule, while others don’t. Some long-term care policies cover only nursing-home stays, while others insure home care and assisted living. Both policy types have widely ranging options of elimination period--that’s the amount of time you’ll pay before you qualify for benefits.
  
  

Misconceptions

• Social Security does not always cover disability claims.disabled sign image by Warren Millar from Fotolia.com
  
  Some think Social Security will pay in the event of a disability. Less than 35 percent of people who apply are approved for Social Security disability benefits. Others think employer disability coverage is sufficient.In fact, employer-provided coverages usually provide only 40 to 60 percent of a person’s income. Long-term care is thought to be for the elderly, but 37 percent of persons needing long-term care are under 64-years-old. Long-term care needs aren’t only for nursing homes. Forty-three percent of long-term care insurance claims are for home-care, rather than a nursing home or assisted-living facility. Finally, many think that health insurance will cover long-term care costs. In fact, health insurance may not cover rehabilitation efforts and custodial care, which is the focus of many long-term care insurance programs.
  
  

Costs

• Policies providing greater benefits are more costly.money on hand image by Albert Lozano from Fotolia.com
  
  Disability and long-term care coverage costs differ widely based on coverage levels and age. Policies with a short elimination period or that cover short-term needs are more expensive than those covering only long-term needs after long elimination periods. Policies with smaller payout periods or restrictions also are less expensive. Some experts believe when weighing the costs and benefits of long-term care insurance, the optimal time to purchase coverage may be between ages 55 and 65. Disability insurances are more expensive for workers in manual labor than for those with desk jobs. Policies are priced based on profession, age, gender and current salary.
  
  

Considerations

• Consider cost of living riders, government benefits, and personal cash reserves.Beautiful Woman Thinks with Pencil & Notepad. image by Andy Dean from Fotolia.com
  
  Cost-of-living rider benefits may be important if applying early for either long-term care or disability insurance. This will increase the amount of coverage with inflation. Shoppers should also consider government benefits, such as Social Security, Medicaid, and current assets that can be used in the case of disability or long-term care costs. Employer benefits may also be sufficient to cover the need. Establishing your budget before buying and calculating whether the coverage level would meet your needs will help you make a wise purchase.