Understanding Long-Term Disability Policy Provisions

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By: Bill Henry
PublishedJul 17, 2020
1 minute read

Utilizing your long-term disability (LTD) benefits is not as easy as simply filing a claim.You must prove you need the benefits.

This article discusses long-term disability provisions, a complex matter we hope to shed some light on.

Questions About Long-Term Disability Provisions? 

Schedule a case assessment when you call 303-688-0944. You can also set up the meeting on your own when you click here.

Your long-term disability insurance coverage is a contract between you and your insurance carrier.

With contracts come duties. For instance, your insurance company has a duty to pay you. But you also have a duty be cooperative and show evidence that you have a legitimate claim.

Long-Term Disability Provisions

Eligibility Waiting Period

When you look at your long-term disability insurance policy, you want to look for the eligibility waiting period from when you were hired.

Depending on when you were hired, you may or may not be eligible for benefits right away.

Benefit Waiting Period

Your policy also has a provision called the benefit waiting period. It may also be listed as the elimination period.

This is the amount of time you must be continuously disabled before you are eligible for LTD benefits.

In most cases, that’s usually 90 to 180 days. Your benefit waiting period coincides.

Disability Benefits

Also in your policy are what benefits you’ll receive. Typically, your benefits are about two-thirds of your pre-disability earnings.

If you bought more insurance, the benefit may be a little higher.

Extra Pay

Your policy is very specific about what is defined as your earning.

You’ll have to look at the policy to see if overtime is covered. Also, if you receive bonuses or commission, your policy will state whether the insurance company will include these as part of your pre-disability earning when it calculates your benefit amount.

Maximum Benefits

While long-term disability payments are based on your earnings, the insurance caps how much you can receive each month.

If your policy’s maximum disability benefit is $5,000, no matter how much you may, that is the most you will be able to receive.

Minimum Benefits

Also, LTD benefits have a minimum benefit. Generally, that’s around $100.

Maximum Benefit Period

Finally, just as benefit payments are capped, the insurance company limits how long you can receive your benefits. This is called the maximum benefit period.

Questions about Long-Term Disability? 

Call 303-688-0944 to schedule a case assessment.

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