Long-Term Disability Insurance — LTD
Insurance — typically employer-sponsored — that replaces a portion of your income (usually 50%–70%) if you become unable to work for an extended period.
Official source: ssa.gov
Long-Term Disability (LTD) insurance is like a financial safety net. If you get sick or hurt and can't work for a long time, this insurance helps replace some of your regular income. This way, you can still pay your bills and take care of your needs while you're recovering.
Many people get LTD through their job – their employer might even pay for some or all of it. If your employer pays the premiums, the money you receive from the insurance might be taxed. If you buy a policy on your own with after-tax money, the benefits you receive are usually tax-free.
LTD insurance generally starts paying out after you've been unable to work for a certain period, often three to six months. It's important to know that LTD is different from Social Security Disability Insurance (SSDI). In fact, many LTD policies require you to apply for SSDI too. A common thing to know is that if you recover and can work again, your LTD benefits will stop.
In real life
- A construction worker falls and breaks their back, keeping them from working for a year.
- Someone is diagnosed with a serious illness that makes them too weak to do their job for several months.
- A person experiences a sudden injury that prevents them from returning to their work for a long time.
Also known as
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Frequently asked questions about Long-Term Disability Insurance
What is Long-Term Disability Insurance?+
Insurance — typically employer-sponsored — that replaces a portion of your income (usually 50%–70%) if you become unable to work for an extended period, beginning after a 90- to 180-day elimination period. Employer-sponsored LTD: premium often paid by employer; benefits may be taxable if employer paid premiums.
Who qualifies for Long-Term Disability Insurance?+
→ LTD is separate from SSDI — many policies require you to apply for SSDI as well.
How do I apply for Long-Term Disability Insurance?+
BenefitKarma's free Benefit Eligibility Screener can point you to the right application path.
Where can I get help?+
Use BenefitKarma's free Benefit Eligibility Screener to see what programs you may qualify for. The Find Benefits tool tool also lets you browse programs by state.
Source: ssa.gov