Long-Term Disability Insurance (LTD)


Long-Term Disability (LTD) Insurance helps replace some of your income for an extended period when you cannot work at all or can only work part-time because of a disability.

To be covered by LTD, you or your employer must pay a monthly premium. When an illness or injury prevents you from working and you are running out of Short-Term Disability (STD) Insurance, you apply for benefits by speaking with your Human Resources representative (if you have a group policy) or your insurance company or agent (if you have an individual policy).

LTD policies require documentation from your doctor that explains your condition; says why you are unable to perform the functions of any job for which you are reasonably qualified based on your training, education, or experience; says that you cannot do any other job that pays a specified percentage of what you used to earn; and estimates how long you will be unable to work. There will be a waiting period between the date you leave work and the date you actually get your benefits. Depending on your plan, the waiting period can be anywhere between 90 days and a year before LTD benefits are paid.

Once the waiting period is over, you will generally get a set percentage of the wages you earned before you were disabled. Although the amount varies, payments are generally around 60% of your previous wage. For example, if you were paid $2,000 per month at work and your policy pays 60% of pre-disability earnings, you will get $1,200 in benefits per month. Depending on your LTD policy, you may get benefits for a set number of years, like two years or five years, or until a certain age, like 65.

After or during your LTD benefits period, you may want to apply for Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or other cash benefits programs. Most LTD policies require that you apply for SSDI.

If you are enrolled in SSDI or SSI while also being enrolled in LTD, your LTD benefits may be reduced. The advantage of being enrolled in SSDI or SSI while getting LTD is that they can help you become eligible for Medicare or Arizona Health Care Cost Containment System (AHCCCS) health benefits, which are not covered by LTD.

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