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Long-term disability insurance explainer

We read with interest a recent article on a personal financial news website about two programs that help employees who are unable to continue working because of injury or illness. Both are familiar to regular readers of our Milwaukee employment law blog: Social Security Disability Insurance (SSDI) and long-term disability insurance (LTD).

Kiplinger points out that only about one third of all U.S. employees have LTD insurance coverage. Like Social Security Disability, LTD benefits are income replacement for workers who have a serious medical condition that prevents them from continuing their careers.

Of course, if your employer does not provide or subsidize LTD insurance, you can purchase a policy on your own, though the coverage does not come cheap.

Kiplinger notes that though LTD benefits are similar to SSDI, there's an important distinction: LTD benefits are typically a fixed percentage of salary (commonly 60 percent) at the time of the disability. SSDI's monthly payments are capped this year at $2,788 regardless of your salary, whereas LTD benefits have no cap.

If you earn $100,000 per year, your annual LTD benefits would be $60,000 (or $5,000 per month).

Another important distinction between the two programs: LTD benefits are often limited to two years for disabling mental conditions. LTD benefits for other conditions can end when you turn 65.

The two share an important trait, however: disabled workers are far too often denied needed benefits for which they are eligible.

Contact an employment law attorney to help you fight for the LTD benefits you deserve. Talk to a lawyer experienced in helping clients get benefits for policies paid by employers (and governed by the Employee Retirement Income Security Act - ERISA) or whether the denial was under coverage you paid for yourself (non-ERISA).

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