Long term disability (LTD) coverage is activated when a policyholder becomes unable to work for long periods of time due to serious injury or illness.

In contrast to other insurance product like life or auto, long term disability coverage is paid over a long period of time rather than a single lump sum. Depending on the insurance policy, a person could stay on LTD for years, according to PolicyGenius.

Some frequently asked questions regarding long term disability benefits include:

How does long term disability coverage work?

When applying for long term disability coverage, the worker must decide the length of their elimination period and the length of their benefit period.

Also known as the waiting period, the elimination period is how long it takes for the first disability check to arrive, which can be up to a year for some policies.

The benefit period is when the disability coverage is paid out, which can last between two years or until retirement. This means that choosing the length of each term can drastically influence the quality of life and income.

How long can a person stay on LTD?

How long one can stay on LTD depends on the terms of their insurance policy, which often have a specified period of time in the range of two to 10 years.

Other insurance policies pay a policyholder until they are 65 years old, which is the preferred long term disability policy. While each insurance policy has different terms and conditions for payout, which can make the policies more or less accessible to the person.

What are the differences between long term and short term disability coverage?

Short term disability coverage
pays benefits typically between three months to a year, after a brief waiting period.

These plans are typically less expensive than long term plans and are commonly offered by companies as a paid benefit plan for all employees. Typically, long term disability coverage covers up to 70% of the employee’s salary.

According to The Hartford, long term disability coverage is designed to last for much longer, as short as two years and sometimes for life depending on the policy. While it has a longer elimination period of at least 90 days, with longer befit periods coming with higher premiums.

The Bureau of Labor Statistics-Fixed Percent Earning analysis states that short term disability insurance typically covers between 50% to 70% of an employee’s pre disability salary

What are the eligibility requirements of long term disability coverage?

Each policy has its own requirements, but employees generally become eligible for long term coverage when they sustain an injury or develop an illness that prevents them from performing their occupational duties and causes them to lose a certain amount of their income.

In addition, these injuries or diseases prevent them from getting a similar job in the same industry or any other gainful employment.

This illness or injury has to be documented as causing long term interference in their lives, which not only prevents them from working but also impacts their overall quality of life. Injuries that can cause employees to stay on LTD include but are not limited to:

• Musculoskeletal/connective tissue disorders (back pain, osteoarthritis)
• Cancer
• Accident injuries
• Cardiovascular complications (heart attack, coronary artery disease)
• Mental disorder

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