Long-term disability insurance kicks in after you have been disabled for a certain period of time, typically three to six months, or at the end of your short-term disability policy term.
Depending on what riders your long-term disability policy includes, it can help replace your income if you need to take months or years off while receiving treatment for an illness like cancer. It can also help supplement your income if you have to cut back on work due to diagnosis or treatment.
Long-term disability policies typically pay 60% to 70% of your gross monthly income. If you become permanently disabled, long-term disability insurance policies either pay out for a prescribed period of time, such as 10 years, or until you reach an agreed-upon retirement age, like 65.
You might be wondering: What about Social Security? Yes, supporting you after you’re no longer able to work is part of what Social Security does. But you have to be permanently unable to do any kind of work to qualify for SSDI. That leaves out lots of people who are partially or temporarily disabled.
In next blogpost, we will discuss how to buy disability insurance.