What is Long-Term Disability (LTD) coverage?

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Long-Term Disability (LTD) coverage offers wage replacement to persons who experience wage loss due to a disability. LTD coverage lasts for at least one year.

What is the difference between Long-Term Disability (LTD) Insurance and Short-Term Disability (STD) Insurance?

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Short-Term Disability (STD) Insurance usually lasts a year or less and you generally get it during the first year after you become disabled. Long-Term Disability (LTD) Insurance can last for a much longer period of time. LTD benefits may continue for a set number of years, such as five years, or until you reach a certain age, like 65.

How do you get Long-Term Disability (LTD) coverage?

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You can get Long-Term Disability (LTD) coverage either through a group or individually. Group coverage can be offered by an employer, a professional group, or association. You can buy individual coverage directly from an insurance broker based on medical underwriting.

Is Long-Term Disability (LTD) Insurance a public benefit?

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No. Long-Term Disability (LTD) Insurance is not a government benefit and is not connected to any public benefit program. It is private insurance that you get through a private company.

To find out if you have LTD coverage through your employer, talk to your Human Resources person. To sign up for an individual policy, contact an insurance company or insurance agent.

If you are looking for information about public Social Security benefits for people with disabilities, see DB101's Social Security Disability Insurance (SSDI) article and DB101's Supplemental Security Income (SSI) article.

Who is eligible for Long-Term Disability (LTD) coverage?

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If you get disability coverage through your employer, you may have to work for the employer for a specified period of time — known as a service wait — before you become eligible for benefits. If you get disability income insurance coverage from a professional group or association, you may have to be a member of the group or association for a set period of time before you become eligible for benefits.

You may buy individual policies directly from an insurance agent based upon medical underwriting. Individual policies are usually available if you have not had any medical treatment for a potentially disabling condition during the past 10 years. Medical treatment includes prescription medications and physician consultations. You may also be denied coverage if you work in a high-risk occupation, are a recreational pilot, or do other activities that the insurer considers risky. Each insurer has its own system for deciding whether or not to offer you coverage.

How soon will I be eligible to enroll in benefits from Long-Term Disability (LTD) coverage?

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If you have employer-sponsored disability income insurance coverage, you must meet the active work requirement in order to be eligible to enroll in benefits. If you get disability income insurance coverage through a professional group or association, you must meet their specific requirements to be eligible to enroll in coverage.

How much income replacement will I get from Long-Term Disability (LTD) coverage?

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Long-Term Disability ( LTD) coverage means you will get a monthly income replacement that is either a percentage of your pre-disability earnings or a specified dollar amount.

Why should I enroll in group Long-Term Disability (LTD) coverage during the initial enrollment period?

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The initial enrollment period is the best time to enroll if you have a pre-existing condition. During the initial enrollment period, your medical history is usually not subject to medical underwriting. However, pre-existing condition exclusions may limit or delay the use of coverage.

What is a pre-existing condition exclusionary period in Long-Term Disability (LTD) coverage?

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A pre-existing condition is any medical condition for which you were diagnosed, treated, or experienced symptoms of before the coverage effective date. If you apply for an individual plan and you have a pre-existing condition, the insurer may choose not to supply you with Long-Term Disability (LTD) coverage.

If the insurer does supply you with coverage, your LTD plan may have a pre-existing condition exclusionary period. During this period of time, your prior medical condition(s) will not be covered by the policy. However, after the pre-existing exclusionary period ends, the condition becomes covered by your disability income insurance.

How do I meet the requirements for a pre-existing condition exclusionary period for group coverage?

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To meet the requirements for the pre-existing condition exclusionary period for Long-Term Disability (LTD) coverage:

Once the exclusionary period has passed, you will then be covered for any pre-existing disability.

How long does a pre-existing condition exclusionary period last in Long-Term Disability (LTD) coverage?

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In group Long-Term Disability (LTD) coverage, a pre-existing exclusionary period usually lasts between 12 months (one year) and 24 months (two years).

If you apply for an individual policy and have a pre-existing condition that doesn’t meet the insurer’s underwriting rules, the insurer will likely turn down your application for coverage.

Does Long-Term Disability (LTD) coverage offer health coverage too?

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No. Disability income insurance coverage only offers wage replacement. In employer-sponsored coverage, the employer may use your eligibility for Long-Term Disability (LTD) to decide your continued eligibility for other benefits, such as health and life coverage.

Who pays for Long-Term Disability (LTD) coverage?

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If you have individual Long-Term Disability (LTD) coverage, you will be responsible for all costs, which can vary depending on your health and the plan you choose.

For group LTD coverage, you may be responsible for no cost, a percentage of the cost, or the entire cost. With employer-sponsored coverage, you may be responsible for the amount that is above what the employer chooses to pay. Your employer will decide how much it will pay and how much you need to contribute. Your employer can explain these benefits details.

How long does Long-Term Disability (LTD) coverage last?

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Long-Term Disability (LTD) coverage can last from one year to the age of retirement — usually 65. However, consult the certificate of coverage (if you have a group plan) or the policy (if you have an individual plan) to confirm the number of years covered by your disability income insurance.

How do I stay enrolled and eligible for Long-Term Disability (LTD) coverage?

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Enrollment and eligibility requirements depend on the type of Long-Term Disability (LTD) coverage you have — group (employer, professional group, association) or individual. For example, if you have employer-sponsored disability income insurance coverage, you will need to meet the active work requirements, which means you have to work a minimum number of hours per week. If you are unable to meet the active work requirements due to a disability and you have passed the service wait and pre-existing condition exclusionary periods, insurance coverage may be used to replace a portion of your wages.

If you have insurance coverage through a professional group or association, you will need to keep your membership to continue eligibility for benefits. For individual coverage, you have to continue paying your monthly premium.

Does what I have in the bank or what I own affect my eligibility for Long-Term Disability (LTD) coverage?

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No. There are no resource limits for Long-Term Disability (LTD) coverage.

What is the difference between private disability income insurance, like Long-Term Disability (LTD) coverage, and public disability programs, such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)?

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Private disability income insurance coverage is offered through individual or group (employer, professional group, or association) plans. Private coverage does not have income and resource restrictions. Coverage varies between insurance policies.

State and federal wage replacement programs, like Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), are public benefits. To be eligible for public income replacement, a person does not have to belong to a group but must meet other specific requirements.

Can I keep my group Long-Term Disability (LTD) coverage if I no longer belong to the group that offered the benefits?

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Yes. Some group Long-Term Disability (LTD) plans are portable, if you are not disabled when you leave the group. A portable plan lets you stay covered under the plan, even if you leave your employer. You would be responsible for paying your premium. Be sure to check your summary plan description to see if the plan is portable.

If your LTD policy is not portable and you go to another employer that offers LTD, you will have to enroll at your new employer during the initial enrollment period, and complete their group plan’s service wait and pre-existing condition exclusionary period.

What else should I know about Long-Term Disability (LTD) coverage?

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If you work less hours or leave work due to a disability, you may be eligible to get partial benefits if this provision is included in your policy. Check the certificate of coverage (if you have a group plan) or the policy (if you have an individual plan) for details. Also, you may want to consider consulting a Work Incentive Consultant about Social Security disability programs, such as Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).