Long-Term Disability Insurance Overview

Long-Term Disability Insurance (LTD) helps replace some of your income for an extended period when you cannot work at all or can only work part-time because of a disability.

To be covered by LTD, you or your employer must pay a monthly premium. When an illness or injury prevents you from working and you are running out of other benefits, such as sick days and Short-Term Disability Insurance (STD), you apply for benefits by speaking with your human resources representative or your insurance agent.

LTD is not a government benefit and is not connected to any public benefit program. It is private insurance that you get through a private company. To find out if you have LTD coverage through your employer, talk to your Human Resources person. To sign up for an individual policy, contact an insurance company or insurance agent.

LTD policies require documentation from your doctor that explains your condition and estimates how long you will be unable to work. There will be a waiting period between the date you leave work and the date you actually get your benefits. Depending on your plan, the waiting period can be anywhere between 90 days and a year before benefits are paid. If you get STD and are covered by LTD, your STD benefits may automatically convert to LTD after a certain period.

Once the waiting period is over, you will generally get a set percentage of the wages you earned before you were disabled. Although the amount varies, payments are generally around 60% of your previous wage. For example, if you were paid $2,000 per month at work and your policy pays 60% of pre-disability earnings, you will get a benefits check of $1,200 per month. Depending on your LTD policy, you may get benefits for a set number of years, like 2 years or 5 years, or until a certain age, like 65.

After or during your LTD benefits period, you may want to apply for Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or other cash benefits programs. Some policies require that you apply for SSDI.

If you are enrolled in SSDI or SSI while also being enrolled in LTD, your LTD benefits may be reduced. The advantage of being enrolled in SSDI or SSI while receiving LTD is that they can help you become eligible for Medicare or Medical Assistance (MA) health benefits, which are not covered by LTD.