Long-term disability insurance provides a steady stream of income to help you cover essential expenses if you become disabled due to a disabling illness or accident. It can be a lifesaver for you and your family during a difficult time, and it’s an important part of any benefits package.
A group long-term disability plan offered by your employer may provide a more robust level of protection than an individual policy. Some employers auto-enroll workers in their long-term disability plans, while others leave it up to employees to choose and purchase the coverage.
The premium for a group long-term disability policy is generally less than the cost of individual policies, according to LIMRA’s data. But group plans also have higher administrative costs than individual policies, which can add up quickly when you’re unable to work.
Some group plans limit the amount of coverage an employee can buy, and the maximum benefit period is limited. These features help to control the cost of a group long-term disability policy.
Many short-term disability (STD) and long-term disability (LTD) policies have a 14-day elimination period, meaning the benefits will only begin to apply if you’re able to show you’re disabled within that time frame. Some STD policies, on the other hand, will pay benefits for up to a year.
If you have a STD or LTD policy, talk to your HR person about whether you’re eligible for a policy extension. This is typically a good idea, as it can extend the duration of the coverage for a fraction of the total amount you might otherwise have to pay.
Alternatively, you might consider purchasing an individual long-term long term disability policy to supplement your employer’s coverage. Individual policies offer a higher level of protection and more flexible benefit payments than group plans, but they’re also often more expensive.
There are several types of individual disability policies, and you’ll need to understand how these policies work before choosing the best one for your needs. Here’s a look at some of the main types:
Own occupation; any occupation; and no occupation
A short-term disability policy will usually only pay out for a few weeks or months, depending on the length of your elimination period. It will pay a percentage of your pre-disability income until you return to work, or it ends.
If you are unsure of which type of policy to purchase, you can talk to your financial advisor or with an insurance agent. They will be able to recommend the right plan for your situation and budget.
You can also consult with a disability attorney who can advise you and file a claim on your behalf. An experienced lawyer can make the process easier and more successful, so you can focus on your recovery.
Your insurance company may deny your claim for a number of reasons, including a lack of evidence supporting the disability you claim, not meeting eligibility requirements or the definition of a disability, filing your claim too late, or making a mistake on your disability insurance application form. Taking the time to find an experienced disability claims attorney can make all the difference in getting the help you need, so don’t delay.