Disabilities can strike at any moment, leaving you unable to work and facing significant financial challenges. With mounting medical bills, daily living expenses, and the stress of lost wages and benefits, it can feel like a never-ending cycle of hardship. In these moments of uncertainty, long-term disability (LTD) insurance can offer a lifeline, providing the financial support you need to focus on your recovery.
As you navigate the world of LTD insurance, it’s essential to understand how these policies work, and what factors determine the length of time you will receive benefits. Will your policy cover your entire period of disability? Will it provide the level of benefits you need to get by? These are important questions to consider as you make your choice.
There are two main types of disability insurance: short-term disability (STD) insurance and LTD insurance. STD benefits are for temporary disabilities and typically last between 3–6 months. On the other hand, LTD benefits provide coverage for those with severe and sometimes permanent disabilities.
LTD benefits are paid to individuals who are unable to work due to a severe injury or illness. These policies are typically offered as a part of an employee benefits package, but they can also be purchased privately. Compared to STD insurance, LTD benefits are designed to last for several years and replace between 60% to 80% of your income if you can no longer work.
When evaluating LTD insurance options, there are three key factors to consider:
The start date of LTD benefit payments depends on the terms of the policy and the type of disability. The waiting period is usually between three to six months but can be as little as 30 days. The length of this period can affect your monthly premium costs, with longer waiting periods often resulting in lower premiums. After the waiting period has passed, you will begin to receive monthly benefit payments.
The length of the benefit period is one of the most crucial decisions you’ll make when applying for coverage. The standard choices include 2, 5, or 10 years, or coverage to age 65 or 67. Some companies even offer coverage to age 70.
A longer benefits period may sound ideal, but it does often come with higher premiums. While the average length of a long-term disability is 2.5 years, some conditions may be shorter, and others can be much longer. It is important to consider your needs, age, and income before selecting a policy.
If you need help navigating the world of LTD insurance, speak to a Minneapolis disability benefits attorney today. A lawyer with experience navigating these claims can help you assess different options and identify the right coverage for your situation.