What Does Long Term Disability Insurance Cover?

What Does Long Term Disability Insurance Cover?

Private long-term disability insurance coverage is a financial tool that replaces part of your income if you were to become disabled.

Generally, you can purchase long-term disability insurance coverage that will replace 50 – 75% of your earned income.

  • There is usually a waiting period before you can receive long-term disability insurance benefits. This means you have to wait a set period of time after the disability occurs.
  • Long-term disability insurance generally provides you with a monthly payment and does not cover specific expenses.
  • Long-term disability insurance payments continue for the duration of your disability or until the stated time limit on the policy has expired.
  • If you purchase long-term disability insurance through a group disability insurance plan at your work and your premiums are deducted from your paycheck and your disability insurance benefits are taxable.
  • Private long term disability insurance purchased through a group disability insurance plan or through an insurance company will enable you to have more financial resources than relying on Social Security Disability Insurance.

If you are able to receive Social Security Disability Insurance your monthly disability benefits are based on your lifetime average earnings covered by Social Security.

How Does Social Security Define A Disability?

The Social Security Administration has an extreme definition they use to define if you are eligible for Social Security Disability Insurance:

The definition of disability under Social Security is different from other private disability insurance programs. Social Security (SSDI) pays only for total disability. No benefits are payable for partial disability or for short-term disability.

“Disability” under Social Security is based on your inability to work. We consider you disabled under Social Security rules if:

  • You cannot do work that you did before;
  • We decide that you cannot adjust to other work because of your medical condition(s); and
  • Your disability has lasted or is expected to last for at least one year or to result in death.
  • This is a strict definition of disability. Social Security program rules assume that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings, and investments. 1.

Social Security Administration’s Statistics On Begin Disabled

According to The Social Security Administration in 2014, it states that 1 out of 4 workers over the age of 20 years will become disabled for some period of time before they retire.2.

Surprising, only a small percentage of disabilities are the result of an accident. A large majority of disabilities are caused by numerous illnesses.

Unfortunately, I am part of the large majority that has become disabled due to illness.

The American Council of Life Insurers and the Insurance Institute of America publishes guides on how to purchase Disability Insurance.


I have learned an important lesson about the alarming chances of becoming a Long Term Disability Statistic; “Private Disability Insurance May Be Expensive But It’s Priceless.”

I hope you find, What Does Long Term Disability Insurance Cover? useful. 


1. The definition used by The Social Security Administration to determine if you are disabled.

2. Social Security Administration states 1 in 4 workers over the age of 20 years will become disabled for over 90 days.

You can read about my experience with Disability Insurance on Amazon’s #1 Disability Insurance Business Law Book; HypoGal and Disability Benefits.


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