Part 1: Long Term Disability Coverage
What?
A Long Term Disability Plan (LTD) provides the beneficiary with income in event of an illness or injury that no longer allows them to work for an extended period of time. LTD typically provides 60-70% of pay; if you want more it is advised that you see extra coverage through your employer or an insurance agent.
Who?
Employees who are unable to work due to an injury or disability.
Where?
Many group benefits plans include LTD coverage. Individuals can also purchase individual disability coverage.
When?
LTD payments usually start 90 or 120 days after the illness or injury.
Why?
Long-term disability coverage provides income for those who are unable to work.
How?
Employers should ask their benefits advisor, insurance company or HR consultant about LTD. Employees, when starting a new job should ask about LTD and other benefits and review the coverage conditions and terms of each benefit.
Important to Note:
If the employer pays the LTD premium, any payments on a claim will be taxable to the employee. When the employee pays, payments are non-taxable, providing an significantly higher benefit.