Disability Insurance Requirements

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What is Long Term Disability Insurance?

Long term disability insurance can provide the money that you need to help pay your living expenses and support your family if you can’t work for an extended period of time because of an accident or illness. Some employers will offer long term disability coverage as part of a benefits package, but many people purchase a long term disability insurance policy through a provider like Guardian Life that is customized to their needs.  

How does long term disability insurance work?

If you had an accident or became ill and couldn’t work for a year, or two years, or ten years would you have enough money to get by? Most people wouldn’t. That’s why people buy long term disability insurance. What is long term disability insurance?   

Long term disability insurance will pay out a benefit usually between 40-60% of your salary if you can’t work anymore because of an injury or illness.¹ There are some requirements set by your insurance company that you will need to meet in order to determine if your situation may be covered It is important to read the policy terms very closely before purchasing to make sure you understand the requirements and limitations.   

There will be a period of time called an elimination period you will need to wait before your benefits will start being paid out.² The period of time you have to wait depends on the policy  you buy, and can range from 30 days up to a year.³ The most common elimination period is 90 days, so that means you wouldn’t be eligible for benefits until you have been out of work for three months. Some people purchase short term disability insurance that will pay out benefits in just a week or two⁴ and will continue to pay for several months as a way to bridge the financial gap during the elimination period or the waiting period. 

What does long term disability insurance cost?

Long term disability insurance usually costs between 1-3% of your salary⁵ depending on the options that you choose like how long your elimination period is, how much of a monthly benefit you want, how long you want the benefits to be paid, and whether you choose a policy that is “own occupation” or “any occupation.” If you choose a policy with a shorter elimination period or a longer period of time for benefits to be paid, your premiums will be higher, you may find the extra cost is worth it. If you don’t get short term disability insurance coverage through your employer the cost of short term disability may not be worth it for your situation. To get the most bang for your buck long term disability is typically a much balanced choice.  

Does long-term disability cover maternity leave?

Long term disability insurance is a smart thing for women to have if they expect that they will get pregnant. Long term disability insurance generally doesn’t consider a normal pregnancy a disabling condition. However, there are many complications that can occur during pregnancy, birth, and after the birth, that could be considered disabling enough to prevent returning to work.  

Post partum depression is another discussion directly related to pregnancy that can impact a woman’s ability to return to work for an extended period of time. More than 15% of women experience PPD that can keep them from returning to work.⁶

You may be able to purchase long term disability insurance when you are pregnant but read the policy carefully because you may not be able to purchase a policy after your second trimester. Some policies will have elimination periods of 90 days or less but some may have an elimination period of a year which means you wouldn’t be able to get any benefits during that year.⁷

Long term disability examples 

Few people ever think about what they would do if they couldn’t work for an extended period of time or ever again. They think about catastrophic injuries like crushed spine or an illness like a stroke but maybe they don’t think about what they would do if they tore an ACL and needed surgery and two years of rehabilitation that left them unable to do their job. Or what would happen if they slipped and fell on ice in their driveway and sustained a traumatic brain injury that made it impossible for them to work. But those accidents, injuries, and illnesses happen every day.  

The Social Security Administration found that one in four workers who are age 20 will end up with some type of disabling injury or illness before they reach the age of retirement.⁸ Long term disability insurance may be  the best protection you can get to make sure that you will have money coming in on a regular basis if you can’t work.  

Not every injury or illness is totally disabling. Maybe you can’t work for two or three years and then you can return to work part time. Long term disability insurance would help pay a reduced benefit that would help you bring in more income even though you could only work part time. Just make sure that any policy you buy includes a provision for different types of disability.  

Long term disability insurance also offers different ways to qualify for disability benefits.  For example, “Own Occupation” LTDI will pay you benefits if you can’t work at the job you were doing at the time you became disabled, but you can still collect benefits even if working at completely different kind of job. “Any Occupation” LTDI will only pay if you can’t work at any job for which you are reasonably suited. If you purchase an “own occupation” disability insurance policy while working as a nurse and you become injured and can’t do the physical aspect of nursing work anymore but you can teach nursing skills at a school you would be able to collect insurance benefits and work in your new career field.  

Long-term disability and termination of employment

It is important for you to understand how your benefits work and the impact to your job, if you are receiving short term or long term disability benefits. In many circumstances, employment is terminated during a long term disability because your position needs to be filled. Ask your employer what the details are for your short term and long term disability benefits.  

What illness qualifies for long-term disability & Insights

If you want to find out more about what illnesses and injuries are covered under long term disability insurance you can read this article. You can also find out more about short term vs long term disability, long term disability insurance and how to choose a  policy that best works for you here. Guardian Direct® has an entire library of articles to help you understand individual long term disability insurance. We can answer questions like “Is long term disability taxable?” and “How does long term disability work?” or “How long does long term disability last?” We also can give you long term disability quotes for your unique situation. We offer  tips and insights that can help you make informed decision when choosing an insurance plan to protect yourself and your family if you should ever be unable to work for a long period of time, due to a disability.  


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  1. https://www.nerdwallet.com/article/insurance/disability-insurance-explained, (2017) accessed May 2021

  2. https://www.nerdwallet.com/article/insurance/disability-insurance-explained, (2017) accessed May 2021

  3. https://www.policygenius.com/disability-insurance/what-is-long-term-disability-insurance/ (2018) accessed May 2021

  4. https://www.thebalancecareers.com/short-term-disability-basics-1177839 (2019) accessed May 2021

  5. https://www.daveramsey.com/blog/disability-insurance, (2021) accessed May 2021

  6. https://www.policygenius.com/disability-insurance/what-to-know-about-disability-insurance-and-pregnancy/ (2019) accessed May 2021

  7. https://www.policygenius.com/disability-insurance/what-to-know-about-disability-insurance-and-pregnancy/ (2019) accessed May 2021

  8. https://www.nerdwallet.com/article/insurance/disability-insurance-explained (2017) accessed May 2021