Long-Term Disability Insurance: What It Actually Covers (and How to File)

Long-term disability (LTD) insurance replaces a portion of your income — usually 50-70% — if you can't work for an extended period, typically beyond the 3-6 months that short-term disability covers. Where LTD comes from: - Employer-sponsored plans (most common) — your employer offers it as a benefit, often paying part or all of the premium - Private/individual policies — you buy these yourself, usually through an insurance broker - If you're not sure whether you have coverage, check your benefits portal, employee handbook, or ask HR directly How it works in practice: 1. There's an elimination period (a waiting period before benefits kick in) — usually 90 or 180 days. Short-term disability or sick leave typically fills this gap. 2. Benefits are paid monthly, usually for 2 years, 5 years, or until age 65, depending on your policy 3. Most policies have two definitions of disability: - 'Own occupation' (usually first 2 years): you can't do YOUR specific job - 'Any occupation' (after 2 years): you can't do ANY job you're reasonably qualified for — this is a much higher bar 4. Many policies reduce your benefit if you're also receiving SSDI or state disability — this is called an 'offset' How to actually file a claim: 1. Get your claim form from your employer's HR or your insurance company directly 2. Your doctor needs to complete the medical portion — be specific about how your condition prevents you from working (functional limitations, not just a diagnosis) 3. Submit everything in writing and keep copies of EVERYTHING 4. The insurer has 45 days to decide (under ERISA for employer plans), but can extend by 30-day increments 5. If denied, you have 180 days to appeal — and you MUST exhaust the appeal process before you can sue under ERISA Critical things people don't know: - Under ERISA (which governs most employer-sponsored LTD plans), you can't sue in regular court — you have to go through the appeal process first, then federal court if needed - Your policy may require you to apply for SSDI — and if you're approved, the insurer will often claim an offset for back-pay SSDI benefits - LTD insurers frequently use surveillance and independent medical exams (IMEs) — be honest and consistent in everything you report - You can often work part-time while on LTD (called 'residual' or 'partial' benefits) — but report it honestly, because undisclosed income is the #1 reason claims get terminated