Long-Term Disability Insurance (LTD)
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The Basics
Long-Term Disability (LTD) insurance is private insurance that helps people who can’t work because of a disability. If you have LTD insurance, it will replace some of the income you lose when you can’t work because of a disability.
Some people have LTD insurance from their employers. Others purchase it individually. For both types of policies, your medical history is important.
Each LTD policy will have different details about signing up for a plan and the benefit you will receive.
If you have LTD insurance and you are injured, contact your human resources manager or insurance agent as soon as possible. This early contact will make sure that you get help replacing some of your income as soon as possible.
Long-Term Disability (STD) Insurance is not a government benefit, and it is not connected to any public benefit program. It is private insurance coverage 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.
Note: If you are looking for information about Social Security benefits for people with disabilities, see DB101's Social Security Disability Insurance (SSDI) article and DB101's Supplemental Security Income (SSI) article. If you want information about California's State Disability Insurance (SDI) program, see DB101's SDI article.
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Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
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Getting LTD Insurance
Long-Term Disability Insurance (LTD) helps replace some of your income when you can’t work at all or can only work part-time because of a disability. Private companies that provide LTD policies have different enrollment requirements and benefits. LTD insurers publish summaries of the particular plans they offer.
How to Get LTD Insurance
Some people have LTD insurance through an employer, union, or other professional organization. This type of policy is known as group coverage. You can also purchase individual coverage directly from an insurance company/agent. If you have group coverage and leave your employer or professional association, you may be able to convert your group policy into an individual one.
Your Medical History and Pre-Existing Conditions
LTD providers consider your medical history when you sign up. Depending on which coverage you are getting, Individual Coverage or Group Coverage, LTD providers will look at your medical history differently.
- Individual Coverage: The insurance company decides what conditions might cause a disability in the future. These are called “potentially disabling conditions”. Some LTD insurers will not approve you for individual coverage if you have had treatment for a potentially disabling condition within a certain period of time. Treatment includes advice from a doctor and medication. The review of your medical history is known as medical underwriting.
- Group Coverage: If you have had treatment for something within the past 3 to 6 months, you have a Pre-Existing Condition. LTD providers will still offer you Group Coverage if you have a pre-existing condition, however, there will be a set period of time when they won’t pay a benefit if this condition causes you to miss work. The period of time is generally 12 to 24 months and is called the pre-existing condition exclusionary period.
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Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
- The Basics
- Getting LTD Insurance
- The Long-Term Disability Benefit
- Other Information
- Example
- FAQs
- Pitfalls
- Resources
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The LTD Benefit
When You Will Receive Your First LTD Check
Most LTD plans have a service wait, which is a set period of time before coverage actually begins. If you have a pre-existing condition exclusionary period, it starts after the service wait ends. When the service wait and exclusionary period are over, you are eligible for a benefit.
The date when this happens is called the coverage effective date.
Once you apply for a benefit, there is usually a waiting period (also called an “elimination period”) before you can begin to receive benefits. This waiting period generally lasts between 30 and 180 days. Shorter or longer waiting periods are available under some LTD policies. Usually, the longer the waiting period, the lower the premium will be.
The Benefit
Each policy has a different way of determining how much money you will receive. Some send you a set dollar amount. Other policies might take your pre-tax wages and give you a certain percentage of those wages. The pre-tax wages that insurance companies use to determine your benefit may include bonuses and other salary from the employer.
Most policies will subtract any benefit you receive from other programs like Workers’ Compensation, Social Security Disability Insurance, State Disability Insurance, or other programs that are designed to replace income.
Benefit Period
Benefit period defines how long LTD benefits will be paid. The most frequently offered periods are two years, five years or until you retire.
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Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
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Other Information
Types of LTD insurance
There are two major types of individual long-term disability insurance:
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Non-cancelable: under a non-cancelable policy, you have the extra security that premiums can never be raised above those shown in the policy. Also, the policy can not be cancelled as long as the required premiums are paid on time.
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Guaranteed renewable: with a guaranteed renewable policy, the premiums can be raised, but only if the change affects an entire class of policyholders. For this reason, initial premiums for guaranteed renewable policies can be less expensive than non-cancelable policies.
Other less expensive policies with limited, if any, premium or renewability guarantees are also sometimes available.
Definition of Disability
LTD providers use two common definitions of “disability”:
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Own Occupation or “Own Occ”: to be considered disabled you must be unable to perform your own occupation. Generally, you will get a benefit check for between two and five years.
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Any Occupation or “Any Occ”: to be considered disabled you must be unable to work in any occupation. Generally, you will get a benefit check until you can go back to work or until the policy ends.
Part-Time Work
You may also be able to return to work part-time and still receive part of your LTD benefit check. Make sure to check the details of your plan before returning to work part-time.
Exclusions
Many policies will not cover disabilities caused by drug abuse, alcoholism, attempted suicide, war, or attempts to commit a crime.
Learn more
Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
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Example
John's Story
John is unemployed. In January 2021, he goes to the doctor because his back is hurting him. The doctor prescribes some painkillers and sends him home to rest. In February, John gets a job and signs up for Long-Term Disability Insurance (LTD).
A month later, he gets a letter from the insurance company about his LTD. It explains that he will have a 2 month service period. This means that he will have LTD coverage starting April 1, 2021, two months after the date he was hired. So, if John is injured between February and April, he will NOT be able to apply for LTD benefits. The LTD policy uses the “Own Occ” definition of “disability”, which means that John has to be unable to work in his own occupation to be defined as disabled.
The letter goes on to explain that his back injury is a pre-existing condition, and that he will have a 1 year exclusionary period. The exclusionary period begins on the same day of his coverage, April 1, 2021. If he becomes disabled due to his back injury between April 1, 2021 and April 1, 2022, he will NOT be able to collect LTD benefits.
In May of 2022, John hurts his back and can no longer go to work. Since the waiting period and exclusionary period are over, John can begin to receive LTD benefits. He knows that it may take awhile to get his first LTD check, so he immediately contacts his Human Resources manager. The manager tells him that there’s a 60 day elimination period from the date of disability before his benefits begin. John will start receiving his benefits on July 1, 2022.
John was making $2,000 a month before he hurt his back again. His policy pays 50% of pre-disability wages for up to five years. So, John will receive $1000 a month from LTD until he is no longer considered disabled or 5 years pass, whichever is shorter.
January 1, 2021 | John goes to the doctor for his back |
February 1, 2021 | John is hired and signs up for LTD with a 2 month waiting period and 1 year pre-existing condition exclusionary period for his back injury |
Feb. 1 – March 31, 2021 |
John is not yet covered by LTD |
April 1, 2021 – April 1, 2022 |
John is covered by LTD, but not for a back injury |
April 1, 2022 onwards | John has full LTD coverage |
May 1, 2022 | John injures his back, and can no longer go to work. |
May 2, 2022 | John calls his Human Resources manager and applies for LTD |
May 1 – July 1, 2022 |
The 60 day elimination period where John is not working but is not yet receiving a benefit |
July 1, 2022 | John begins to receive his monthly LTD check of $1000 |
Different plans may have different definitions of disability, waiting periods, exclusionary periods, and benfit calculations.
Learn more
Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
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Frequently Asked Questions
What is long-term disability (LTD) coverage?

Long-term disability coverage provides wage replacement to individuals who experience wage loss due to a disability. LTD coverage lasts for at least one year.
How do you obtain long-term disability (LTD) coverage?

Long-term disability coverage can be obtained either by a group or individually. Group coverage can be offered through an employer, professional group or association. Individual coverage can be purchased directly from an insurance broker based upon medical underwriting.
Individual policies are usually available if you have not had any medical treatment during the past 10 years for a potentially disabling medical condition. Medical treatment includes prescription medications and physician consultations.
Is Long-Term Disability (STD) Insurance a public benefit?

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 cash benefits for people with disabilities, see:
Who is eligible for group long-term disability (LTD) coverage?

If long-term disability coverage is offered from an employer, the individual must work for a specified period of time - known as a service wait - prior to becoming eligible for benefits. For professional or association-affiliated LTD coverage the individual must be a member of the group for a set period of time.
How soon can I be eligible to enroll in group long-term disability (LTD) coverage?

If you have employer-sponsored LTD coverage, you must meet the active work requirement to be eligible to enroll in LTD coverage. For professional or association-affiliated LTD coverage you must meet their specific requirements to be eligible to enroll in coverage. See summary plan description for further details.
How much income replacement will I receive from long-term disability (LTD) coverage?

Long-term disability coverage provides a monthly income replacement that is either a percentage of gross pre-disability earnings or a specified dollar amount. Variations do exist so be sure to check the summary plan description for details.
Why should I enroll in group long-term disability (LTD) coverage during the initial enrollment period?

The initial enrollment period is the best time to enroll if you have a pre-existing condition. During the initial enrollment period, you are 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?

A pre-existing condition is any medical condition for which “medical care” was received three to six months prior to the coverage effective date. LTD plans may have a pre-existing conditions exclusionary period. During this period of time, an individual's prior medical condition(s) will not be covered by the policy. However, after the pre-existing exclusionary period expires, the condition becomes covered under LTD coverage.
How do I meet a pre-existing condition exclusionary period for group coverage?

- Enroll during initial enrollment;
- Continue membership in the group (employer, professional group, association); and
- Remain enrolled in coverage during both the service wait and pre-existing condition exclusionary period.
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?

In long-term disability coverage, a pre-existing exclusionary period can last between 12 to 24 months.
Does long-term disability (LTD) coverage provide health coverage too?

No. Long-term disability coverage only provides wage replacement. In employer-sponsored LTD coverage, the employer may use your eligibility for long-term disability to determine continued eligibility for other benefits such as health and life coverage.
How much does long-term disability (LTD) coverage cost and who pays for it?

If you have individual LTD coverage, you will be responsible for all costs.
If you have group LTD coverage, you may be responsible for no cost, a percentage of the cost or a set premium. With employer-sponsored LTD coverage, you may be responsible for the amount that is above what the employer elects to pay. This is determined by employer agreements with their insurance companies. Your employer, Human Resources Department or personnel staff can explain these benefit details.
How long does long-term disability (LTD) coverage last?

LTD coverage can last from one year to age of retirement – usually 65. However, consult the summary plan description to verify the number of years covered by the insurance policy.
How do I stay enrolled/eligible for long-term disability (LTD) coverage?

Enrollment and eligibility requirements depend on the type of long-term disability coverage you have- group (employer, professional group, association) or individual. For example, if you have employer-sponsored LTD coverage, you will need to meet the active work requirement, which entails working 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, LTD coverage may be used to replace a portion of your wages. If you have LTD coverage through a professional group or association, you will need to maintain membership to continue eligibility for benefits.
Does what I have in the bank or what I own affect my eligibility for long-term disability (LTD) coverage?

No. There are no income or assets restrictions for long-term disability (LTD) coverage.
What is the difference between long-term disability (LTD) coverage and state and federal disability programs such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)?

Long-term disability coverage is private insurance offered through individual or group (employer, professional group or association) plans. LTD coverage does not have income and assets restrictions. Coverage varies between insurance policies. State and federal wage replacement programs are public benefits - Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). To be eligible for public income replacement, an individual does not have to belong to a group but must meet specific requirements.
Are there immigration rules to qualify for long-term disability (LTD) insurance program?

No. Immigration rules that should be considered relate to your legal residency status and whether you are legally authorized to work in California.
Can I keep my group long-term disability (LTD) coverage if I no longer belong to the group that provided the benefit? 

Yes. Some group LTD plans are portable if you are not disabled when you leave the group. Be sure to check your summary plan description to see if the plan has a portability option. If the LTD policy does not allow portability, you must reenroll in a new group during the initial enrollment period, complete the service wait and pre-existing condition exclusionary period again.
What other benefit programs are available to me and how will they work with long-term disability (LTD) coverage?

What else should I know about long-term disability (LTD) coverage?

If you reduce work hours due to a disability and the appropriate provision is included in your policy, you may be eligible to receive partial benefits. Check the summary plan description for details. Also, you may want to consider consulting a benefits planner about State Disability Insurance (SDI) or Social Security disability programs such as Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
Learn more
Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
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Common Pitfalls
Confusing Long-Term Disability (LTD) Insurance with public disability benefits
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 cash benefits for people with disabilities, see:
Not keeping good records of your condition
The more records you have of your symptoms and how your disability affects your day-to-day life, the easier it will be to get approved for SDI benefits and, if needed, make a case for continuing your benefit payments past the date your medical provider originally said you should be able to return to work. Keeping a daily journal of even minor symptoms can help quite a bit, and can jog your memory when you are talking with medical providers about your medical condition. If your disability makes you unable to keep a journal yourself, a friend or relative can do it for you.
Denial of Your Disability
It is common for individuals to have periods of time when they deny to themselves, their families, and medical provider(s) that a disabling condition exists. For some, it is an approach to coping with a new condition. During this period of time, the individual’s communication with medical providers may not accurately or fully describe the severity of a condition or how seriously it affects day to day activities.
Basing decisions on misinformation
Most of us usually rely on other people’s experiences to understand how to deal with our own situations. The problem with this is that disability and government benefits are person-centered. Benefits programs fit each person differently, based on a variety of facts and conditions, such as:
- Your work history
- How much you earn
- What you own
- What your disability is and the extent of your impairment
- How clearly you report the details of your condition to your medical provider
- How well your medical provider understands or documents these details
- What benefits an employer provides, and
- What benefits you have purchased individually.
Learn more
Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Long-Term Disability Insurance (LTD)
Try It
Resources
Private Insurance Resources
When purchasing an insurance policy, look for reputable companies and be sure to read all of the details of your plan. You can find ratings of insurance providers at the following websites:
America’s Health Insurance Plan, a trade association, offers a helpful Guide to Disability Income Insurance.
Getting Help with Your Benefits
If you get Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), or Childhood Disability Benefits (CDB), and you're looking for a job, a trained Benefits Planner can help you avoid problems with your job plan. If you need help or have questions about your situation, you can call the Ticket to Work Help Line at 1-866-968-7842 or 1-866-833-2967 (TTY), Monday through Friday.
View DB101's full list of experts who can help you understand different benefits.
Community-Based Organizations
Various community-based organizations guide people through state, federal, public, and private health and income programs. Some organizations may work with specific populations while others work with people with any type of disability. Here are a few examples
Goodwill Industries services range from personal evaluation and office skills training to career counseling, childcare, and transportation. Some Goodwill Industries centers also do benefits planning for people who get SSI, SSDI, and Medicare. Find locations at www.Goodwill.org, or by calling (voice) 1-800-466-3945.
The California Foundation for Independent Living Centers lists centers serving people with all disabilities. Many of these centers do benefits planning for people who get SSI, SSDI, and Medicare. If they don't offer benefits planning themselves, Independent Living Centers can refer you to local benefits planners. Find the list of independent living centers at www.CFILC.org, or by calling (voice) 1-916-325-1690 or (TTY) 1-916-325-1695.
The California Department of Public Health's Office of AIDS lists 1,300 organizations offering HIV/AIDS services throughout California. Some of these organizations provide case management, benefits planning, and benefits counseling services that can include help with public and private benefits programs. You can search the list online, or call (voice) 1-800-367-AIDS (2437) or (TTY) 1-888-225-AIDS (2437).
Disability Rights California provides representation for consumers of public programs who are disabled. Website publications include topics on health care, benefit programs, and In-Home Supportive Services.
Learn more
Short-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. STD usually lasts 9-52 weeks.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.