What is Long Term Disability?

Long Term Disability – Overview

Long-term disability refers to conditions preventing a person from working for an extended period, not just any illness or injury. This time can last for a few years, sometimes even longer. With long term disability insurance, that person may receive a portion of their actual income.

This helps the policyholder maintain financial stability by providing a portion of their income during the disability period.

What Is Long Term Disability?

Long-term disabilities may result from various causes, including illnesses and injuries. When a person is unable to work for a more extended period due to some chronic health issues or injuries, it is called a long term disability. People with long-term disabilities may be eligible for various insurance benefits. It can help a disabled person to deal with their life situations without a steady income.

Long Term Disability Insurance

Long term disability insurance can offer multiple benefits to help you deal with different situations. For example, it can pay you around 50 to 70% of your actual salary if you cannot work for a more extended period due to an injury or a chronic illness.

You can start receiving these benefits after your short-term disability ends. Long-term disability benefits typically start after an initial waiting period following the incapacitating event, which can range from 10 to 53 weeks.

The length of your long-term disability coverage can last for five to ten years or until that person turns 65. However, it also depends on specific policies.

Some Examples of the Long Term Disability

Here is a list of different conditions that can qualify a person to receive long term disability coverage.

  • Mental health problems
  • Any injuries due to an accident
  • Cancer
  • Stroke
  • Carpal tunnel syndrome
  • Brain injury
  • Chronic pain
  • Chronic illnesses
  • Orthopedic injury
  • Neurological disease
  • Psychological conditions like anxiety, depression, etc.

How Long Can a Long Term Disability Last?

What Is Long Term Disability

How Long Can a Long Term Disability Last?

Long term disability generally lasts until the person is ready to resume his professional life. However, coverage can also extend until the insured person reaches the age of 65, which is a common endpoint for long-term disability insurance.

To receive all the benefits of long term disability insurance, a person needs to meet the criteria of being totally disabled. Many insurance policies provide benefits for a specific period, often two years, if the individual cannot return to their previous occupation due to disability.

After two years, if the person is still unable to do any job because of their disability, they will continue receiving long term disability benefits.

4 Different Types of Long Term Disability Insurance

There are different types of long term disability insurance plans.

1. Employer-Provided Plan

The first one is the employer-provided plan. With this policy, the individual will receive up to 70%  of their old salary. This benefit is typically based on base salary and does not include commissions or bonuses. This policy has a financial cap on the total number of years covered or the total amount of pain.

2. Employee-Paid Plan

The next one is the employee-paid plan. In this plan, employers act as facilitators. They connect employees to an insurance plan of any insurance company. However, the cost of this plan is not covered by employers.

In this case, the employee’s contribution is deducted monthly from their salary. It is often similar to a traditional health care plan. The employees can customize all the terms and conditions through riders. They can add specific plan coverage according to their preferences.

3. Shared Cost

Another insurance plan is a shared cost plan. Here, the employees and employers contribute to covering their coverage plan’s cost. Both parties have options to split the overall cost of a given plan. They both can make monthly contributions to this cost.

However, the employer can also cover the lower coverage amount and the basic plan. In this case, the employees must pay for the higher coverage plan to cover their insurance. This higher coverage amount can be framed with the number of years of your policy or the annual financial cup.

4. Government-Supported Plans

Different government-supported plans are available in the market, including Social Security Income (SSI) or Social Security Disability Insurance (SSDI). These two are the long term disability benefits that the federal government generally offers.

SSDI is available to individuals who have worked and contributed to Social Security through payroll taxes. SSI is designed for low-income individuals who have not earned enough work credits to qualify for SSDI or who have limited income and resources.

Different Criteria Can Differ Long Term Disability Plans

  • Rate of cost for coverage
  • Number of years required to redeem the plan
  • Qualifying events or Eligibility conditions
  • The total amount of the financial coverage, whether as a percentage of the salary or as the dollar amount.
  • If it includes any retirement protection like savings account contributions, IRA, or not
  • Whether it includes a cost-living adjustment or not


Long-term disability is the inability to work for an extended period due to serious illness or injury. Long-term disability insurance can offer these people multiple benefits and help them cope with life events without a steady income.

See Also

Does Medicare Cover Long Term Care

California EDD Disability

Coinsurance vs Copay

Dental Insurance for Senior Citizens

NSO Insurance

Current Version
November 26, 2022
Written By
Shubham Grover
March 16, 2024
Updated By
Andrea Morales G.

Follow us