Life Insurance and Long-Term Disability

Many companies offer Life Insurance and Long-Term disability (aka LTD) as benefits. However, in most cases you’ll likely get only bare minimum Life Insurance coverage by default, and LTD may be something you have to pay for out of pocket. So is LTD and additional life insurance worth it? You might think, “I’m young, I’m healthy - nothing could possibly happen to me. Why waste the money?”

I actually got my first management job many years ago when my own manager went on Long-Term disability for Carpal Tunnel Syndrome. It turned into a permanent disability, alas, and I was promoted into that management position. And not only that, another person from that company later went on LTD for the same Carpal Tunnel issue. So it just goes to show, you don’t have to be a skydiver to be at risk of an LTD.

BTW, that company had provided free LTD insurance until then, but as soon as my manager started collecting benefits the premiums for the company apparently shot up, and we had to start paying out of pocket for the coverage.

The same goes for Life Insurance. You may not lead a risky lifestyle, but as they say you never know when you might get hit by a bus. If you are single with no dependents you might think that life insurance is superfluous. However, your parents might have sunk a ton of money into your college education and might be expecting a return on that investment in their old age – so don’t’ forget about them. And of course if you are married or have other dependents, adequate life insurance should be a no brainer.