Long-Term Disability (LTD) insurance is an insurance policy that protects an employee from loss of income in the event that they are unable to work due to illness, injury, or accident for an extended period of time, usually 90 days or more.Â
Some estimates state that the average employee suffering from a long-term illness or injury actually misses 2.5 years of work.
This is also known as paycheck insurance (income replacement) which provides coverage in the event of an illness and/or an injury. This is a monthly benefit.
The duration of the benefits vary depending on the contract. Typically, LTD lasts until social security retirement age.
Long-Term Disability premiums are based on employee salary information, the duration of coverage, the maximum monthly benefits and the employer industry.
There are three parts to the claim; employer portion, employee portion and the physician portion. This process typically takes two to three weeks to receive a response from the carrier.
Depending on the extent of the injury, a member may be eligible to go from Short-Term Disability to Long-Term Disability if the doctor approves it. Long-Term Disability benefits can be administered as soon as Short Term Disability ends, there is no overlap.
Homemakers are an exception to disability benefits. Since Long-Term Disability benefits are designed to replace an individual’s income, a homemaker with no income history cannot be insured.
