Understanding Your Long-Term Disability Insurance Plan

Long term disability (LTD) insurance is an insurance product that an individual can purchase to help cover certain medical expenses in the event they become disabled. LTD plans are often offered through an employer’s benefits package and can either be paid completely by the employer or employee, or shared by two parties. It’s not mandatory to purchase these plans.

How Long-Term Disability Insurance Works

While every plan has a set of unique features, which are mainly based on the insurance carrier, as a whole, long-term disability policies work in the following manner:

• Policy benefits begin after you have been out of work for at least 90 days and are anticipated to remain out of work for an extended period.
• Disability benefits pay between 50 and 75 percent of your previous income. As an example, if you made $2,000 per month before becoming disabled, you would receive benefits of between $1,000 and $1,500 a month from your policy.
• If you are receiving other disability benefits, such as workers compensation or SSDI, your policy benefits will be reduced by the amount issued by these entities. LTD payments are the last to pay.
• Benefit periods range from five to 10 years depending on the policy you have purchased.

When Your Claim Is Denied

Sadly, many LTD providers automatically deny claims without even looking at the information about the case. This is done in an effort to reduce the amount of claims they pay. If you have been denied insurance benefits under your LTD policy, you are encouraged to speak to an attorney. An attorney can represent your claim to the insurance provider and establish your rights to receive benefits.