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Long Term Disability

What is Long Term Disability Insurance?

Long term disability insurance (LTD) is an insurance policy that protects you from loss of income in the event that you are unable to work due to illness, injury, or accident for an extended period of time.


Why should I purchase a Long Term Disability Insurance Policy?

According to the Council for Disability Awareness, an employee has a one in four chance of becoming disabled prior to retirement and the average long-term disability absence from work lasts 2.5 years. A disability can strip you of your ability to make a living. While some people can tap into their savings to get by without working for a few months, few people can afford to stop working altogether for a longer period of time. LTD insurance is an important protection because it ensures that you will still receive a percentage of your income, typically between 50-70 percent of your salary, if you cannot work due to sickness or a disabling injury. LTD insurance provides protection for all work-related accidents or injuries that are not covered by Worker’s Compensation.


When Am I Considered Disabled?

The definition of disability will vary depending on your LTD insurance policy. Some policies pay benefits when you’re unable to perform the job duties of your current occupation. Other policies only pay if you are unable to perform any and all occupations based on your age, education, vocational training and years of experience. Some policies off a hybrid approach where benefits are pain for a certain period of time where you are unable to perform your current occupation, after which the policy continues to pay only if you are unable to perform in any and all occupations.


When will the LTD benefits start?

Long-term disability coverage picks up where your short-term disability insurance leaves off. If you don’t have short term disability insurance, there is usually a mandatory waiting period before your Long Term Disability insurance begins. The average waiting period is typically between 90 and 180 days.


How long do the benefits last?

The benefits last until you can go back to work or for the number of years stated in the policy. Some policies pay out as long as you are disabled or until 65 years of age.


How Much Disability Income Insurance Do I Need?

Generally, disability coverage should be chosen to replace 60 to 70 percent of your total taxable earnings (gross income).


How Can I Obtain Coverage?

Some employers provide their employees with group coverage. You should contact your benefits administrator to see if your company offers or if you are eligible for LTD coverage. Also, some organizations such as AARP offer disability income benefits for members. If your employer does not offer LTD coverage, you may choose to purchase an individual LTD insurance policy for yourself.


What Additional Benefits are Available?

Social Security Disability benefits (SSDI) may be available to individuals that become disabled prior to reaching full-retirement age which is between the ages of 65-67 depending on your birth date. You may also qualify if you are a widower or an adult child of an individual with a disability. In addition, VA disability benefits may be available to veterans, a veteran’s surviving spouse, surviving child or surviving parent. Please contact our office for more information on whether or not you qualify for SSDI or veteran’s disability benefits.


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