Long Term Disability Insurance and Social Security Disability Benefits

Injuries or illnesses that result to long-term disability have long-lasting effects that can render any person unable to perform work for at least six months. For those who are employed and enjoy an employer-sponsored comprehensive employee benefits package that includes a long term disability (LTD) insurance policy, the cash benefits their (LTD) insurance policy pays can serve as a financial safety net for the duration of 5 or 10 years, or until the insured employee reaches the age of 65 (duration actually depends on the plan purchased).

Long-term disability insurance (LTD) is a type of insurance policy that is designed to protect an employee from loss of income in the event that he/she becomes incapable of work, due to illness, injury, or accident, for a long period of time.

Though long-term disability insurance ensures that an employee will still receive a percentage of his/her income, typically about 50% – 70%, it will not pay cash benefits to employees who sustain work-related accidents or injuries that are covered by Workers’ Compensation Insurance program.

LTD is usually employer-sponsored. If a company, however, does not offer long term disability insurance, then an employee has the option to purchase an individual long-term disability plan from his/her preferred insurance agent; he/she can also purchase a personal supplemental long term disability insurance policy for additional coverage (unlike an LTD insurance policy, which is subjected to taxes, a supplemental LTD insurance is tax exempt). Some employees actually consider purchasing supplemental long-term disability insurance because an employer-sponsored long term disability insurance is usually insufficient to meet a disabled employee’s needs.

Additional information provided by Fields Disability lawyers regarding LTD says that most long-term disability policies require that any extra income you receive be deducted (off-set) from your payable long-term disability benefits. This requirement is usually put in place to alleviate the long-term disability carriers’ costs in paying out benefits. Thus, to reduce the amount an LTD carrier will be required to pay you, it will have you apply for Social Security Disability benefits, which are considered as “income” and, therefore, can be off-set from the amount a carrier will pay.

Leave a Reply

Your email address will not be published. Required fields are marked *