You work hard—on rigs, in hospitals, or on factory floors, but if a serious health issue keeps you from working, how will you cover your expenses? Long-term disability insurance replaces part of your income when you can’t work for months or longer. Understanding how it works helps you prepare for the unexpected.
What is long-term disability insurance?
Long-term disability (LTD) insurance provides income protection when a non-work-related health issue keeps you off the job for an extended period. It’s different from workers’ comp or short-term disability. LTD is especially important for people whose income supports a household or who work in physically demanding roles.
LTD is typically:
- Included in employer benefit packages
- Available through private insurers
- Used for illnesses or injuries unrelated to work
- Activated after a waiting period
Knowing your coverage well will help you ask the right questions if you need to seek legal assistance.
How LTD insurance works
Here’s how most LTD policies work:
- Benefit amount: Typically 50–60% of your pre-disability income.
- Elimination period: Often 90 days before benefits begin.
- Benefit duration: May last 2 years, 5 years, or until retirement, depending on the policy.
- Offsets: Other income sources like SSDI may reduce your benefit.
According to the Social Security Administration, disability benefits are paid to individuals who can’t work due to a medical condition expected to last at least one year or result in death.
Why it matters to know your coverage
Not all LTD policies are the same. Some offer broad coverage and longer benefits. Others have strict limits or narrow definitions. That’s why it’s important to read your policy carefully.
You may need to provide ongoing medical documentation to keep receiving benefits. Some policies redefine “disability” after two years, which can affect your eligibility. Knowing what’s covered—and what isn’t—helps you avoid surprises if you ever need to file a claim.