Long Term Disability Insurance: What It Is and Why It Matters
Long term disability insurance is a form of protection that helps replace a portion of your income if you become unable to work due to a serious illness or injury. While many people focus on health insurance to cover medical expenses, disability coverage is often overlooked. However, the loss of income can be just as damaging as the cost of treatment, making long term disability insurance an essential part of financial planning. How Long Term Disability Insurance Works Most long term disability insurance policies begin paying benefits after an elimination period, which is the waiting time between the start of the disability and when payments begin. Common elimination periods range from 30 to 90 days. During this time, individuals often rely on savings or short-term disability coverage. Once the elimination period ends, the policy typically pays a percentage of the insured’s pre-disability income, usually between 50% and 70%. The benefit may continue for a set number of years or until ...