Long term disability insurance is a coverage plan that allows people suffering from disabilities to have a source of income. It is vital for absolutely everyone who has misplaced their potential to be employed due to their disability. In this article, we will talk about what long term disability insurance is and the way you could avail one if you are laid low with an impairment.

What Is Long-Term Disability Insurance?

Long-Term Disability Insurance (LTD) is a financial tool to help replace your income when you are unable to work due to injury or illness. LTD occurs when short-term disability insurance fails to cover premiums. Also, it often depends on the type of disability you have and how long it will affect your life.

Generally, an LTD is a policy that replaces your income when you are unemployed due to your disability. Payment of the benefit is directed towards you, and you’ll decide how to make use of the same to sustain your lifestyle. 

Moreover, this insurance product will assist in the payment of expenses for maintenance of your standard of living. This is especially true when you’re deprived of getting a regular salary due to your disability.

Some instances where you can take benefits of long term disability insurance are as follows that restrict you from conducting your present job role:

• Accident causing severe back injury;
• Time required to recover from surgery; 
• Injury leading to chronic pain or loss of limb; 
• Occurrence of mental health condition requiring intensive treatment; 
• Medical condition leading to reduction or impairment of motor function; 
• Illness leads to difficulty staying at work for long periods.

What Does Long-Term Disability Insurance Cover?

Coverage of disabilities and exclusion of the same differs from policies and providers of the LTD. One of the major factors that determines the coverage is the severity of the disability and how it impacts the capacity to work. 

You’ll need to understand that long-term disability insurance does not cover existing issues before the disability occurs. However, this will not disqualify you from getting an LTD, but pre-existing diagnosis will not be covered. This means you will need another insurance policy that will cover your pre-existing illnesses. 

How Does Long-Term Disability Insurance Work?

Just like any insurance, you will register for a policy via your employer and might pay premiums to keep it active. On the other hand, when an occurrence of qualifying disability will arise, you will apply for a claim to the provider. 

Generally, this leads to submission of documentation provided by your doctor to prove your disability. If your disability claim gets approved then only you will begin to get payments from the provider. So, from these payments you’ll be able to cover some parts of your income. However if you need continuous payments from the LTD, you have to provide evidence of your impairment regularly. 

On the other hand, if your impairment is related to work, the LTD insurance will only cover it if you are deprived of worker’s compensation benefits. However, if you are under both worker’s compensation and long term disability insurance, you will receive both payments. But there’s a twist to it, your insurance provider will deduct a certain percentage from the overall payouts. You will find details about this provision mentioned within your policy. 

When Does A Long Term Disability Insurance Benefit Start?

If your disability is covered by the LTD, you will see that your policy has an elimination period. The time from your date of disability to your benefit start date is defined as the elimination period. 

Moreover, in this time frame you’ll observe that you’re not getting any benefits. So, the policy will determine your elimination period. On the other hand, LTD’s have elimination periods that run parallelly with the short term disability insurance you have under your name. Similarly, this allows the creation of zero gaps for the benefits provided for your disability. 

How Long Does A Long Term Disability Insurance Last?

Long term disability insurance is known to provide coverage for a time period of your impairment or till the retirement age mentioned in your Social Security number. On the other hand, some policies might limit the benefits for certain circumstances. 

Due to this, it is crucial that you read the insurance policy thoroughly to have a better understanding of the duration of benefits. LTD insurance provides coverage for longer time periods. But, short term disability insurance can be a better option if you are acquainted with an illness that extends less than six months. 

What Is Own Vs. Any Occupation Coverage In A Long Term Disability Insurance?

Such kinds of insurance policy tend to have two variations of disabilities – own occupation and any occupation. These two kinds can be generally observed within the same insurance policy. However, each has its own time frame for being eligible for claim. 

Own occupation applies within the first twenty four months of benefits of a LTD insurance, or any employment that applies afterwards. So, with your own occupation coverage you can receive benefits when you’re unable to work within your own employment. So, this coverage generally means work that an employee regularly conducts, which serves as a regular source of their income. However, it is not not only secluded to a specific job role the employee has with their employer. So, it might be similar tasks that might be performed by other employees within an organization. 

On the other hand, if you receive benefits when you are unable to work that requires specific qualifications like training, education, and experience, it is called any occupation. 

Where Can I Get Long Term Disability Insurance?

You can avail for a long term disability insurance through your employer. There are many employers who provide group LTD insurance as part of their employee benefit program. 

On the other hand, you can get enrolled into LTD insurance while you’re hired. If you get to experience a qualifying life event (QLE), you have the eligibility to get enrolled in an open enrollment. 

You can talk to a financial advisor or an insurance lawyer to have greater insights into the options that are available within your policy. 

How Much Does A Long Term Disability Coverage Cost?

The cost of your LTD coverage will depend on a variety of elements, which includes your provider. However, it is highly cost effective than other financial tools. 

Generally, a 35 year old man is eligible to get a $1000 benefit monthly from an average monthly premium of $25. You can easily make use of the Disability Insurance Calculator to have a better idea of the payouts you can expect from your LTD. 

Typically, individual and group long term disability insurance packages cost around 1% to 3% from your annual salary. However, the exact price shall depend on factors like age, health, income, benefit term, and coverage. 

Final Thoughts 

Having the knowledge about the coverage terms and benefits associated with long term disability insurance is vital. This will allow you to have a better understanding of the ways you can effectively enroll in LTD insurance. Similarly, also ensure to take advice from an experienced insurance attorney to have a good insight in the same.

Read Also:

• Who Is A Commercial Litigator?
• What Is Eviction Without A Lease?
• How Do I File An Injunction In The US?
• All You Should Know About Trusts And Estates Laws