Some employers provide their workers with private plans to protect their financial stability during tough times, such as injuries or health problems that cause life-altering disabilities. However, not all of them have the same terms and payment schemes.
Here are the three common types of private long-term disability (LTD) plans:
- Employer-provided: It pays around 60% to over 70% of the employee’s basic wages with a payout limit.
- Employee-paid: The employer becomes the facilitator in this setup. They connect their employees to insurance companies and deduct payments from monthly wages.
- Shared cost: The worker and their employer contribute to pay for the plan. Sometimes, employers can cover the most basic package and allow their workers to upgrade through salary deductions.
Qualifications for eligibility and other details can vary depending on the insurance provider. Even so, employees should receive all of the essential information during enrollment.
Is it different from SSDI?
LTD plans have a lot of things in common with SSDI. However, private LTD insurance may have more unique elements, including:
- Simpler qualification process
- More benefits according to your policy and circumstances
- Based on your basic earned income
- Competition-driven programs leading to more cost-effective benefits
LTD and SSDI have the same rules regarding qualifications, waiting times and premiums.
Additional privileges of LTD
Aside from financial aid, LTD can also come with other benefits, such as training if you need to change jobs after suffering a disability. You can be eligible for this if reassignment after suffering a disability.
Additionally, you can continue your LTD coverage even if you leave your employer for a new job. However, you should review your policy thoroughly to determine any restrictions regarding coverage and unqualified disabilities or health conditions.
