Long-Term Disability Insurance:
The Coverage Most People
Don't Have - But Need
The average long-term disability claim lasts 31.6 months. Without long-term disability insurance, a 31-month disability would exhaust most people's savings and force them to liquidate retirement accounts, sell assets, or rely on family. LTD insurance prevents that scenario.
Call 877-PATRIOTKey Policy Features: What to Look For
Definition of Disability
CriticalElimination Period
ImportantBenefit Period
CriticalPolicy Type
ImportantCOLA Rider
RecommendedResidual Disability
RecommendedLong-Term Disability Questions
What is long-term disability insurance?
Long-term disability (LTD) insurance replaces 60-70% of your income for extended disabilities lasting months, years, or until retirement age. Benefits begin after an elimination period (typically 90-180 days) and continue for the benefit period specified in the policy - 2 years, 5 years, to age 65, or lifetime. LTD is the most important disability coverage because it protects against the financially catastrophic scenario of being unable to work for years.
How much does long-term disability insurance cost?
Long-term disability insurance typically costs 1-3% of your annual income. A person earning $80,000 per year might pay $800-$2,400 per year ($67-$200 per month) for a quality individual LTD policy. Factors affecting cost include: age, occupation (white-collar vs. blue-collar), health, benefit amount, elimination period, benefit period, and policy features (own-occupation definition, COLA rider, etc.).
What is the difference between group and individual long-term disability insurance?
Group LTD (through your employer) is typically less expensive but has significant limitations: it's not portable (you lose it if you change jobs), benefits are taxable if your employer pays the premium, the definition of disability is often 'any occupation' after 2 years, and coverage is typically limited to 60% of base salary. Individual LTD is portable, benefits can be tax-free, you can choose 'own-occupation' definition, and coverage can be customized. Most financial advisors recommend supplementing group coverage with an individual policy.
What is a COLA rider on a disability policy?
A Cost of Living Adjustment (COLA) rider increases your disability benefit each year to keep pace with inflation. Without a COLA rider, a $5,000 monthly benefit that begins at age 40 will have significantly less purchasing power by age 60 due to inflation. COLA riders add 10-20% to your premium but are highly valuable for long benefit periods. Common COLA rates are 3% annually or tied to the CPI.
Get the Right LTD Policy
The difference between a good LTD policy and a bad one can be hundreds of thousands of dollars in benefits. Call us for a free policy review and comparison.