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60 Second Savings: Long-Term Disability

Here's who needs the insurance -- and how to make claims and collect.

What are the odds of being disabled to the point where you can't work for an extended period of time?

Well, pretty good, actually, according to the Insurance Information Institute (III). At age 35, Americans have a 45% chance of becoming disabled for 90 days or longer before age 65, says the III. And those folks have a 70% chance of being disabled for another two years.

For protection, there's long-term disability insurance, which may allow disabled workers to receive up to 65% of their base salary during the disability period. Experts say it may be more pertinent than life insurance, especially for those who have a single source of income, a stack of bills and dependents.

Getting disability insurance isn't too hard -- most employees can check with their human resources department to find out more.

"Pretty much all large employers provide this benefit," says George Faulkner, a principal at Mercer Health and Benefits. Large is defined as more than 50-100 workers. On average, says Faulkner, buying an employer-sponsored plan costs half a percent of one's base salary a year. You can also choose, for extra money, to buy a policy independently from insurance agents like Guardian, Mass Mutual and Northwestern Mutual, which offer personalized plans based on age, income and lifestyle.

But collecting disability is pretty tough these days, according to legal experts.

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To view Farnoosh Torabi's video take of today's segment, click here.

The reason is that the definition of disability may vary from policy to policy, and proving disability has become more challenging.

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Individuals applying for long-term disability believe it is a generally simple and straightforward process. It is anything but," says Troy Rosasco, a disabilities attorney with Turley, Redmond & Rosasco in New York, whose firm works on about 300 cases a year.

For example, some insurance providers define disability as an inability to perform your specific job. Others deem it as an inability to perform any job, which is harder to prove.

Also, symptoms like fatigue, pain or nausea are not sufficient, Rosasco says, as they're immeasurable compared to something like a broken back. To submit a proper and defendable disabilities case, individuals should work closely with their physicians.

Farnoosh Torabi joined TheStreet.com TV in July 2006 as the site's first official video correspondent. Previously, Farnoosh was a business producer and on-air reporter for NY1 News, Time Warner's 24-hour news channel in New York City. Farnoosh is a regular columnist for AM New York and has written for Money, Time, New York Daily News and Newsday. Farnoosh is a graduate of Pennsylvania State University, with a degree in Finance and International Business and holds a M.A. from the Columbia School of Journalism.