How much does long term disability insurance pay?

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When searching for the best long-term disability insurance for yourself be sure to consider these common factors.

Long term disability insurance is something everyone should have to help protect their income if they become sick or disabled. How much does long term disability insurance pay? That depends on the policy that you choose but generally you can expect long term disability (LTD) insurance to pay about 60% of your gross salary¹.

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Some employers offer long term disability insurance plans to their employees but not that many. In 2018, 34% of employers made LTD insurance available to their employees, while 42% offered their workers short term disability insurance². Short term disability insurance benefits typically start within days of you becoming sick or injured and will pay out benefits for a just a few months. For most people having long term disability insurance may be more financially beneficial than short term insurance. So if your employer doesn’t offer long term disability insurance you’ll need to purchase your own LTD insurance. When you’re shopping for LTD insurance plans some common things that you need to consider include:

Waiting Period

Many types of insurance include a waiting period before the benefits become available. Sometimes a waiting period is called an elimination period. The elimination period for LTD insurance depends on the insurance policy itself and the provider, but most often long term disability insurance waiting periods range from 90 days up to a full year³.

During the long term disability waiting period time you won’t be receiving any benefits so you will need to either have short term disability insurance that is paying benefits during that time or have savings or another source of money that you can use to help pay for your living expenses. When you’re choosing a LTD insurance provider you should look for one that has a reasonable waiting period so that you’re not left struggling to pay for your expenses.

Premium Cost

The more straightforward way to get a specific premium cost for your unique situation is to get a quote from an insurance provider that is based on your unique situation. In general you should plan on paying between 1-3% of your salary on LTD insurance premiums⁴. The cost of the premium for LTD insurance is variable because it depends on certain factors like:

  • Your age

  • Your work history

  • Your location

  • Your health

  • How much coverage you want to buy

  • The length of the elimination period

  • The length of the coverage

Medical Requirements

Obviously your health is going to be part of the criteria used when determining the cost of the LTD insurance policy. The point of the insurance is to protect you if become seriously ill so your health status is relevant. The insurance provider will typically want to know if you have any predispositions for serious illness that can be disabling. Some companies may require that you have a full physical while others, like Guardian Direct® PayGuard , will require that you submit some medical information with your application.

Private Or Group Disability Insurance

If your employer offers group disability insurance you should still consider getting your own private long term disability insurance plan to replace that plan or to supplement the plan offered by your employer. There are a few advantages to group disability insurance but there are some big drawbacks too. The biggest drawbacks of relying on group disability insurance are that your coverage is tied to your job at that company and that you may not receive as much of a benefit as you could get through private disability insurance⁵. A private LTD insurance plan will stay in place as long as the premium is paid no matter what job you’re at.

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Is there a long term disability insurance waiting period?

Long term disability insurance does have a waiting period before coverage begins. Typically the waiting period for LTD insurance is five months. The waiting period for the LTD insurance to begin coverage may include some short term disability coverage and/or Social Security disability benefit⁶. Short term disability insurance will typically pay some benefits starting as soon as you are injured or too sick too work but those benefits will only last for a couple of months depending on the term of benefits that is specified in your policy. You may need to have savings or other money to live on while you wait out the waiting period on your LTD insurance policy.

Do I have to pay back my long-term disability insurance?

A lot of people have questions about how LTD insurance works with Social Security disability insurance but it’s not as confusing as might seem. It can take several months or ever long in some cases for your Social Security disability claim to be either approved or denied, and if it’s denied and you appeal that will increase the wait time before you start receiving benefits from the SSA. During that time you will likely be getting the monetary payout from LTD insurance.  

Long-term disability and pregnancy

Pregnancy and giving birth are not considered to be disabling on their own. But, if you have complications with your pregnancy that require bedrest or if there are complications with the birth like a C-section that mean that you will be unable to work those may be covered by a long term disability insurance policy. Post partum depression is also covered in some cases. But it’s important to know that you must have the insurance policy in place and active before you become pregnant in order for any of the complications related to your pregnancy or birth to be covered. Otherwise it’s considered a pre-existing condition and might not be covered⁷.  

Does long term disability continue after termination & Insights 

Long term disability insurance that you purchase through a private insurer is not tied to a particular job and will continue even if you lose your job. If you have group disability insurance offered through your employer then your coverage can be terminated if your job is terminated⁸.

If you still have questions about direct to consumer individual long term disability insurance, Guardian Direct is here to help. We have a library of resources that will help you understand the different types of long term disability insurance and get insights, and advice from insurance professionals to help you figure out how much Long term disability insurance coverage you need to help protect yourself and your family.


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