When an individual cannot work due to a disability, Long-Term Disability Insurance can help by replacing some of the income that would have been earned over an extended time. People whose employers have paid a monthly premium are covered by LTD.
When other benefits, like Short-Term Disability Insurance or sick days, no longer provide benefits, then workers can apply for LTD benefits. Workers who have both STD and LTD could have their STD benefits convert automatically to LTD after a specific period, depending on their policies.
A doctor’s documentation is required by LTD policies, which should outline the condition and estimate the length of the disability. There is also a waiting period between the last date of work and when a disabled person receives his or her disability benefits. That period could be from 90 days to one year before any benefits are received.
Following the initial waiting period, an LTD usually pays a percentage of whatever wages were being earned prior to the disability. That percentage is generally approximately 60 percent but could vary. For example, if pre-disability earnings were $2,000, then the LTD payment would be $1,200 a month. Those benefits could be for a specific number of years or until a specific age, depending upon the LTD policy. Applying for Supplemental Security Income or Social Security Disability Insurance at the same time is also a good idea and could be required by certain LTD policies.
Not all LTD claims receive approval by the insurance company. When a long-term disability benefits claim is denied, an employment law attorney could help by filing a timely appeal or even filing suit if it is deemed necessary.
Source: World Institute on Disability, “Short-Term and Long-Term Disability Insurance: The Details“, October 21, 2014