Three sides of a coin

Tuesday, May 5, 2015
When one considers insurance, the majority of claims are paid to 3rd parties. For example, life insurance proceeds are paid to one's beneficiary, auto claims to the body shop, medical claims to a doctor or hospital, and so on.

But three types of plans, all of which are fairly similar, actually pay benefits to the insured. These are  (in no particular order) critical illness (CI), long term care (LTCi), and disability insurance (DI).

We've blogged on LTCi many times (most recently here). Thanks to FoIB Sandy M, we learn that Fidelity (of investment fame) has produced "a pretty cool chart of US and various sorts of health care" including a very useful interactive map of how much long term care costs around the US.

We haven't blogged much on Critical Illness coverage, which is a shame, because these plans also pay the insured cash benefits for things like heart attacks and cancer. These plans can be particularly useful if one has a high deductible (HSA) plan or one of the newfangled ObamaPlans with sky high out-of-pocket exposures. By providing a quick injection of cash, these plans can mitigate a lot of financial pain.

Finally, the fine folks at the Council for Disability Awareness remind us that May is Disability Insurance Awareness Month. To that end, they're sharing the results of their 2014 consumer survey. Among the key findings:
  • 57% of working adults report having no private disability insurance
  • One third would consider buying disability insurance if they knew more about it
  • 41% would consider buying it if it were less expensive, but perceptions about costs vary considerably
That last is important: many (most?) folks think disability coverage is unaffordable, but seldom check to confirm that by asking for a quote. So if you're one of the 57%, why not check with your employer about a short or long term disability  group plan or - better yet - ask your professional, independent agent for a quote.

You may be surprised by just how affordable coverage can be.