Long-term disability insurance

What is long-term disability insurance?

A serious illness or injury can turn your life upside down for months—or even longer—and might also mean you aren’t able to work. If this happens, long-term disability insurance may give you the financial support you need to pay for housing, food, and other expenses so you can focus on getting better. In addition to providing replacement income, your plan may also help you return to work and your normal routine as quickly as possible.

How does it work?

Long-term disability insurance provides you with a check equal to a portion of your income once your claim is approved, which can help lessen the financial impact of a covered disability. When you purchase long-term disability insurance through work, it can help you manage your expenses when you can’t work due to a covered disability without relying solely on your savings.

When deciding to sign up for long-term disability insurance, consider the following:

  • How much would I need to cover my expenses?
    Add up your monthly expenses to estimate how much replacement income you might need. Then, check the plan your employer is offering you to figure out how much replacement income you are eligible for and see if it fits your needs. Based on the plan, you may have the option to choose a percentage of your current income or a specific dollar amount—up to the maximum amount allowed by your plan. If you choose a percentage of your income, use this formula to calculate how much of your monthly expenses might be covered:

    Monthly income X Percentage amount = Potential benefit

  • How soon would I receive benefits?
    Depending on your plan, you may be able to start receiving replacement income in as little as a few months from the date you are unable to work due to a disability covered by your plan. Consider how long your savings will last before you would need replacement income and how other sources of income or insurance might impact your benefits.
  • How long would benefits last?
    You may be eligible to receive benefits up to the maximum period allowed by your plan, provided that you are still eligible to receive benefits.

Your plan costs depend on your age, weekly earnings, and other factors. Consider how a long-term disability plan meets both your needs and your budget.

Long-term disability insurance can help you stay on track so an unexpected absence from work doesn’t cause long-term effects on your finances.

SLPC 24556 09/14 (exp. 09/16)

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