What is Long Term Disability Insurance: All You Need to Know

The body for creating disability awareness came out with a report that the average absence in long term disability is usually 34.6 months. They revealed that accidents are not the major cause of most disabilities that occur. Emergencies such as Pregnancies, musculoskeletal injuries, heart disease, cancer, and other infirmities are the major culprits and not work-related injuries.

Some employers have to offer a long term disability insurance policy on behalf of their employees, to secure and make sure they can be present at their job within a reasonable time frame. Long term disability can cover for an employee until they get to the point they are physically impaired to work. However, this depends on the type of plan they are in.

What is Long Term Disability Insurance?

Long term disability insurance is an insurance plan or policy that serves as a protection to an employee from loss of wages or income based on the occurrence that he or she is impaired to perform his or her work due to several factors such as accident, injury or illness for a longer period of time. This usually takes above six months.

Long-Term Disability Insurance policy

Long term insurance policies cover some parts of your income which is around 50 – 70% when you become ill or injured. This disability insurance is a different form of compensation that is issued out to workers based on the fact it is not related to work illnesses or injuries.

When an employee becomes impaired to work for some months, a long term disability policy can cover for a portion of the employee’s salary. Long term disability often commences after a short term disability insurance policy has expired. This takes place around 10 to 53 weeks following an eligible occurrence, with an average time frame of around 26 weeks.

Coverage Terms and Responsibilities of Long Term Disability Insurance Policy

Disability insurance is often one of the essential aspects an employee can get from a benefits package. Some firms prefer to offer only short term disability plan, while others don’t think about it or cannot afford to offer it. One thing you should know is long term disability is not a prerequisite by any means.

Many employers issued out long term disability events that are being funded via a third-party administrator known as an insurance agency. Employers can select the amount that will fit into their budget for their numerous employees.

The duration benefits for these long term insurance plans vary, in the sense; some policies pay three to ten years’ value of disability. While some may pay until they get to 65 years old based on a rate schedule. It all falls back to the option that the employer has decided to use for his or her employees.

Employees that are filing for long term disability insurance plan can only qualify based on specific terms that will be outlined. The major terms are shortlisted below:

  • An employee needs to work for his or her employer for a specified time frame before their actual coverage sets in.

  • Employees must have worked full-time. This is often 30 hours or more in a week.

  • Employees need to choose their disability insurance benefits and also contribute to the policy.

The idea of long term disability insurance benefits is not restricted to only monetary assistance. Larger firms can pay for various options. Some may provide occupational restraining to help those that can’t perform their duties anymore. While some can decide to be more restricted with clauses that can avert disability insurance policy for pre-existing issues.

Premium Payments for Long Term Disability Insurance

Premiums refer to the amount that is being paid on a regular basis to an insurance policy. Several years ago, many insurance firms paid higher premiums for a long term disability plan. Some employees have switched to a way of extending several options to their employees for premiums paid. This depends on the option that has been chosen, there may be numerous tax and costs implications. These options include:

  • Shared cost plan.
  • Employee paid premiums.
  • Employer-paid premiums.

Personal Long Term Disability Insurance Policy

Micro business owners may not have the capacity to offer disability insurance for their workers. If this occurs, for you as a business owner, you might have a second thought of offering detailed information for your team to enlighten them on the efficacy of disability insurance.

You could even add information about some insurance firms such as website and brochure information for your workers or employees’ reference. As a worker or employee, there is a tendency for you to look into personal disability insurance. If your employer doesn’t see the importance to offer you a long term disability insurance policy. You can also check around for some policies that will suit your needs.

Benefits of Long Term Disability Insurance Plan

There are numerous benefits one can enjoy from this type of insurance plan and here they are:

  1. Covers living expenses:

    It helps you pay for your basic needs such as rent, food, utility bills, car payments, clothing, etc.

  2. Direct monthly payments:

    A portion of your monthly income is being paid directly to you if you are impaired to work after waiting for a longer period of time.

  3. Rehab incentives: 

    This may include basic financial incentives that have been designed to assist you to go back to work.

  4. Competitive rates:

    Since your employer will be doing this for you, there will be a discount when subscribing to any disability insurance policy.

As an employee working in a firm, you don’t have to rely on your steady income to support you and your family that will be so unwise to do. Long term disability insurance assists you in replacing your income if you are mentally or physically impaired and cannot do your work from six months upward to several years.


Most employers offer short term disability insurance to their employees, but it only replaces 50% of the employee’s income for three to six months. In addition to that, there will be taxes to pay when you are making payments. Also, these plans depend on the basis of your employment with the firm. This is the reason long term disability insurance is a better option.

Author: Brandon

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