Options for Getting Long Term Disability

Workers who get injured at their workplace might get disabled for a longer time and might not be able to work during that time. Such workers, who are unable to come to work due to an injury in the workplace, have to be compensated for loss of income. An employer himself has to compensate their loss of income through the long term disability benefits or with the help of an insurer.

Long Term Disability Options

As per the estimation of the US Census Bureau and the Council for Disability Awareness, American workers have a 1/5 chance of becoming disabled and around 2½ years of average long term disability. This data throws light on the importance of the long term disability insurance. Long term disability insurance comes in various options like full price paid by the employer, funded entirely by the employee, funded by the insurer and shared among the employer and employee. In the fourth option, the share of the employer is decided by the employer himself based on a percentage of the employee’s salary. 

Who is Eligible?

An employee who has worked for certain period of time in full time capacity becomes eligible for this benefit. For this disability coverage, full time work is considered as 30 or more hours per week. 

Various Options’ Benefits

The extent and coverage of the benefits depends on the type or option of disability plan and its terms and conditions. 

Employee-Paid Policy

Here you pay the premium of long term disability insurance yourself, and thus the benefits you receive will be exempted entirely from the taxation. But such insurance have to be voluntarily accepted by the employee. 

Employer-Paid Policy

In the employer-paid policy, disability benefits are taxed as in this case, the benefits are treated as regular income. 

Special Policy

In few special policies, there will be reimbursement of medical premium, vocational rehabilitation programs, 3 months of survivor benefits and more. 

Guaranteed Renewable Policy

The policy cannot be cancelled by the insurer unless and until the premiums are not paid. 

Non-Cancelable Policy

The premium of the policy can never be increased by the insurer and that is why it is regarded the best option for the long term disability plans. 

Rider Policy

It is also called as residual benefits rider plan, and as per this plan, a difference in the old and new salary is paid as benefit to the injured worker, provided if the new salary less is than that of the old salary. 

Cost of Living Policy

It is also referred to as cost of living rider policy meaning that the value of the policy will increase with an increase in inflation. 

Own-occupation Policy

This is a specialized plan for highly skilled employees or employees in upper management level. As per this special plan, an injured employee can receive benefits through out the life term of the insurance plan even without changing the profession. 

As the benefits and perks vary with different plans, it becomes important to understand the terms of the policy or insurance plan before going for it.

General Duration and Coverage

The duration of the benefits depend on the type of plan selected. It can be for 5 to 10 years. Some plans pay the benefits to the disabled employee until the employee becomes 65 years old or up to a maximum of 10 years, whichever precedes. Usually, 50% to 70% of the employee’s salary is paid as the long term benefit to the employee.

Final Word

Consult a disability lawyer or disability insurance provider in order to get more details about the various other options. Having qualified legal advice can help expedite the process for getting disability benefits.