Long Term Disability

During your working years, you have a 1 in 3 chance of becoming disabled or dying.

Here are the ten most important things to know about long-term disability (LTD) insurance:

Definition and Purpose:

  • Long-term disability insurance is designed to provide financial support to individuals who are unable to work due to a disability that lasts for an extended period, typically more than six months. It usually covers 40% to 65% of your pre-disability income

Eligibility Requirements:

  • Eligibility for LTD benefits often depends on specific criteria, such as length of employment and the nature of the disability. Policies may have exclusions for certain job positions and pre-existing conditions

Types of Coverage:

  • There are two main types of LTD coverage: group coverage provided by employers and individual policies purchased privately. Group coverage often has lower premiums but lower benefits, while individual policies offer higher benefits but come with higher premiums and stricter eligibility requirements

Conditions Covered:

  • LTD insurance covers a wide range of conditions, including musculoskeletal disorders, cardiovascular diseases, cancer, mental health issues, and neurological disorders. However, some conditions like certain pre-existing conditions and pregnancy (except for complications) may not be covered

Waiting Period:

  • There is usually a waiting period, known as the elimination period, between the onset of the disability and the start of benefit payments. This period can range from 30 days to a year or more, depending on the policy

Benefit Amount:

  • The benefit amount is typically a percentage of your pre-disability income, usually around 60%. However, this can vary, and some policies may offer up to 80% coverage

Duration of Benefits:

  • The duration of LTD benefits can vary. Some policies provide benefits until a certain age, such as 65, while others may offer benefits for a set number of years

“Any” versus “Own” Job:

  • "Own occupation" policies provide benefits if you cannot do your particular job, even if you can work in another occupation.

  • "Any occupation" policies only provide benefits if you cannot work in any job for which you're qualified, even if it’s a job that makes far less.

Social Security Disability Hassles:

  • 1 out of 3 Social Security Disability Insurance (SSDI) claims are denied, and a 1 out of 3 of those decisions take 9 months or more.

Ask Yourself:

  • Could my family make it if my income stopped?

  • How long could I survive on savings?

  • Could I wait a year or more to start receiving disability?

Gateway helps protect your family by shopping the best coverage for you and your loved ones.

Please reach out via phone, schedule an appointment, or email for a free, no-obligation discussion about what makes sense for you and your family.