Texans buy insurance for many different purposes: to protect their home and property from unanticipated loss, to make sure they have health care when they need it and to protect their family in case of the untimely death of the breadwinner. A less common type of insurance, but one that can prove to be extremely valuable, is long term disability insurance.

Private insurance companies offer two basic kinds of disability insurance: short-term disability and long term disability. As the names imply, the former policy covers a disability that lasts a relatively short period of time, usually six months or less. The latter type covers a disability that may last several years or may be permanent. Short term disability policies may often be offered by employers, but long term policies are usually purchased from a private carrier.

The two most important questions that must be answered in purchasing a long-term disability policy are (1) the definition of disability and (2) whether the policy has an extended “elimination period,” that is, a waiting period between the onset of the disabling condition and the payment of benefits. An “own occupation” policy will provide benefits if the insured is unable to work at his own occupation, even if he is able to work at another job. A broad “inability to work” policy requires that the insured demonstrate an inability to work at any occupation. Most elimination periods last between 30 and 365 days; some individuals purchase a short term policy to cover the elimination period. The definition of disability can be narrow, i.e., protecting against the insured’s inability to perform the duties of his own occupation or broad, i.e., protecting against a total inability to work.

The price of policies vary based upon the level of benefits, the length of the elimination period, and the breadth of coverage. Most people who are knowledgeable about disability policies recommend reviewing the coverage and cost of a number of policies before making a final decision.