Long Term Disability Insurance
Some employers offer their employees extra benefits, often at a reduced price, to help them stay financially stable if they have a temporary health issue that prevents them from working.
A long term disability plan within a group insurance policy can help cover a portion of the employee’s wages for a longer period of time, should they need it.
What is Group Long Term Disability Insurance?
Group long term disability is essentially a type of insurance that will allow you to receive income through your plan in the event that you become disabled. This speak only of the insurance benefit available as part of a group policy.
Typically, group long term disability benefits can be utilized after one has become injured, ill, or otherwise disabled. Group long term disability is designed to pay an income to policy holders who have become disabled for an extended period of time. An injury that heals in a week or two will probably not gain approval for long-term disability.
However, an illness that could take many months or even multiple years for recovery could qualify for long-term disability payments.
What Does Group Long Term Disability Insurance Cover?
Group long term disability tends to cover essential living expenses. It can also replace monthly salary payments that are being missed due to disability.
Group long term disability tends to cover these expenses and distribute funds until one of two circumstances happens. When the participant’s benefit period runs out, the long term disability benefits will discontinue.
Additionally, if the illness or injury resolves and the policy holder is able to return to work, long term disability benefits will discontinue, as well.
Long term disability comes in two types of policies. The first policy is called “own-occupation disability insurance.” This type of insurance kicks in when an employee is found to be unable to work their specific job. The second type of policy is known as “any occupation disability insurance.”
This type of insurance kicks in when one can prove that one’s illness or injury prevents them from working any kind of job. It can be more challenging to prove that one cannot work any job compared to not being able to work their specific role.
What Does Long Term Disability Insurance NOT cover?
Long-term disability does not cover extra expenses outside of essential living costs such as housing, food, utilities, and the like. For example, for long-term disability that covers basic living costs, extras may not be covered.
If the long-term disability payments fully replace the monthly salary you were originally paid, you will probably not notice a difference in cost of living and it may cover everything your salary used to cover.
However, if you have a short-term disability or it is found that you do not have an illness or injury warranting long-term disability, you will not have anything covered by it.
What Are The Limitations?
The limitations of these policies include the amount of time for which one can collect benefits.
Additionally, if one is receiving other benefits such as Social Security Supplemental Income or a settlement from an injury, the provider may adjust the amount paid to the recipient to offset the costs.