Long-term disability insurance: What you should expect

Long-term disability insurance can be the coverage you need to help you after suffering an injury, disability or illness. Long-term disability insurance, or LTD, can be vital in many instances, such as during an extended recovery period after surgery, as well as provide years of income (usually at a reduced rate) related to the inability to return to your job due to a medical condition.

Studies have shown that employees with injuries, disabilities or illnesses miss an average of 2.5 years of work. Long-term disability insurance is usually offered by an employer to cover employees who suffer injuries, illnesses or disabilities that keep them out of work for an extended period of time. When employers do not offer LTD insurance, some employees opt to purchase a private LTD insurance policy.

What does long-term disability insurance cover?

Long-term disability insurance covers approximately 50 to 70 percent of an employee’s salary after their short-term disability insurance runs out. Some policies dictate a length of time that they’ll pay out, like a 20-year policy or one that will cover the employee until they become eligible for Social Security retirement benefits at age 65.

Long-term disability insurance is an extremely important part of an employee benefits package. Long-term disability insurance should cover your essential living expenses, make direct payments — monthly or bi-monthly, in most cases — and may offer rehabilitation incentives. Some policies encourage a return to work by building in financial incentives.

How do you file for long-term disability insurance?

You should file your claim as soon as possible. Once you make a claim, the insurance company will decide if your claim is approved. If so, you will begin to receive benefits shortly. If not, you’ll have a chance to appeal that denial of coverage.

If you do receive a denial of the coverage you need, your attorney can work with you to produce the correct documents for the insurance company, to fight the insurance company to obtain proper benefits. In the most serious cases, your attorney can help take your case to court.


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