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Ask Dave

Short Vs. Long Term

Dave breaks down the benefits of long-term disability over short-term for Andrew.

QUESTION: Andrew is debt free and has been approached about short term and long-term disability insurance. Which should he take, and why? Dave breaks it down for him.

ANSWER: Don’t do short term disability, but take the long term disability. Usually, the elimination period is the equivalent of your deductible. When you become disabled, how long is it until they start paying you? A 30-day elimination period is like a $250 deductible. The more risk you take, the less the premiums are. Ask them to price you a 90 and 180-day period and compare the prices. If the difference is small, take the 180-day plan. If it’s large, take the 90-day.