What long-term disability insurance typically covers

No matter how healthy you currently feel, there is always some possibility of becoming ill or getting injured. If you become seriously unwell, you will require costly medical treatment and will not be able to gain an income for a significant amount of time. To protect against this risk, it is advised that employees cover themselves with long-term disability insurance, otherwise known as LTD insurance.

Many employers offer LTD insurance to employees as part of their benefits packages. This is often offered to attract and retain employees, and to show employees that their well-being is prioritized by the company they are employed by. Some people decide to cover themselves with LTD insurance by paying annual premiums.

What does LTD insurance typically offer?

LTD insurance is reserved for instances in which an employee is unwell and unable to work for a long period of time. A disabled person will not be able to claim any payouts from their LTD insurance until they have been suffering from a disabling condition for longer than what would typically be covered by short-term disability insurance. The exact amount of time will depend on the specific insurance policy, but it is usually around 90 days after the initial onset of the disability.

When it becomes possible for a person with a disabling condition to claim LTD benefits, they are typically entitled to between 40% and 50% of the base salary they earned when they were able to work.

If a person continues to be unable to work due to their disabling condition, they will typically be entitled to disability benefits under their LTD insurance policy until they reach retirement age. The LTD insurance policy may alternatively decide to cap the amount of time for which a person can claim benefits. In this case, a claimant may lose the ability to continue making claims after 10 years, for example.

There may be additional features included in an LTD insurance policy that you should look out for when choosing among plans. For example, certain policies will protect against inflation by increasing the benefits you will be entitled to as a claimant over time.

If you are currently unable to work but you're having difficulty claiming the insurance benefits that you deserve, consider challenging your claim denial.

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