How does long-term disability insurance work?

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Andrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

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Anna SwartzAnna SwartzSenior Managing Editor & Auto Insurance ExpertAnna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at, as well as an associate writer at The Dodo.

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Maria FilindrasMaria FilindrasFinancial AdvisorMaria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.


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What is long-term disability insurance?

Long-term disability insurance helps replace your income if you can’t work for an extended period of time — whether it’s for two years or 20 years. If you’re hurt or sick and don’t have any long-term disability insurance, you’d have to rely on your savings to make up for your lost income while you can’t work.

Since one in four people will become disabled before they retire, shopping for disability insurance may be a good idea, especially for people with high incomes or jobs that require extensive training. [1]

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What does long-term disability insurance cover?

Long-term disability insurance covers you by replacing your income while you’re not able to work, though how exactly you’re covered depends on your policy. Long-term disability can pay out in case of situations like:

  • An illness that causes you to lose your sight

  • Complications from pregnancy or childbirth

  • Nerve damage from a medical condition that makes it hard to use your fingers

  • Worsening heart disease that makes it impossible to stay at work all day

  • A sports injury that leads to chronic back pain

Your long-term disability insurance policy may spell out different definitions for partial, full, and catastrophic disabilities. Most of the time, you don’t need to be totally and permanently disabled to receive some long-term disability insurance benefits.

Long-term disability insurance doesn’t cover pre-existing conditions. You can still get long-term disability insurance, but your pre-existing condition would be excluded from coverage. 

Your policy will also have some exclusions, meaning times when it won’t cover you, like if you’re injured while doing something that’s against the law, or you’re hurt in an act of war, or you have a self-inflicted disabling injury.

→ Read more about what disability insurance covers

How does long-term disability insurance work?

Long-term disability insurance works a lot like other types of insurance: you buy a policy and pay premiums (meaning monthly or yearly payments) to keep it active. If you become temporarily or permanently disabled by an accident or illness, you file a claim and provide information from your doctor and employer proving you’re unable to work.

After you make a successful long-term disability insurance claim, you’ll get regular payments like you did when you got a paycheck. But you won’t start receiving any long-term benefits until your waiting period (or elimination period) ends.


Pay your premiums

Make sure to keep up with your disability insurance premiums to keep your policy active.

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Make a claim

Be prepared to provide information from your doctor and employer.


Collect your benefits

You'll start to receive your disability insurance benefits once your waiting period ends.

How much you get will depend on your policy, but usually disability insurance pays out a percentage of your income, so it may not totally replace what you were making at work. 

Your long-term disability benefits usually aren’t taxable (unlike short-term insurance benefits), and you don't have to pay them back. They’re also often larger than disability benefits from Social Security.

If you get what’s called an "own-occupation" policy, you can keep receiving your disability insurance benefits even if you find another job, while an "any-occupation" disability insurance policy means you can’t get long-term benefits if you can work another job.

How long does long-term disability insurance pay out?

While short-term disability benefits last for up to one year, you can receive long-term disability insurance benefits for much longer periods, like two years, five years, a decade, or until you retire.

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Do you need long-term disability insurance?

If you have a high-paying job, or a career that requires lots of schooling or training, you may need long-term disability insurance.

Losing your income and not being able to pay bills or support your family can lead to long-term financial consequences. About 67% of all U.S. bankruptcies and more than half of all foreclosures stem from illness or injury-related medical issues, according to the American Journal of Public Health. [2]

And a disability may be more likely than you think. More than 1 in 4 workers become disabled before they retire (most often from an illness, not an injury). On average, the disability lasts more than three months.

Long-term disability insurance and coverage through your employer

You may still need long-term disability insurance even if you have a disability insurance policy through your work. Much of the time, the disability insurance you get from your job won’t cover you for as long as you’d need it after a long-term accident or illness.

If you have short-term disability insurance through work, you can combine it with a long-term policy for more complete coverage.

How to get long-term disability insurance 

There are seven steps to getting long-term disability coverage:

  1. Calculate how much coverage you need Before you get long-term disability insurance, you should decide how much coverage you need, how long you would want to receive payments, and what waiting period you want.

  2. Consider policy add-ons Some long-term disability insurance companies offer riders, meaning extra coverage you can add to a policy, including a cost-of-living adjustment and the ability to add more coverage to your policy later on. 

  3. Shop around and compare quotes It’s smart to compare long-term disability insurance quotes from more than one company so you can get the best deal for the coverage you need.

  4. Fill out the application paperwork You will need to share your age, gender, location, and job when applying for long-term disability insurance.

  5. Have a phone interview with the insurance company After you fill out an application, the long-term disability insurance company will call you to ask in-depth questions about your lifestyle and medical history.

  6. Provide required information to the insurance company Companies require you to take a medical exam, verify your income, and get a rundown of your health history from your doctor — also called an attending physician’s statement (APS).

  7. Sign your policy and make the first payment After four to six weeks the insurance company will send you a policy. You can start your long-term disability insurance coverage by signing and sending back the policy and making your first payment.

How much does disability insurance cost?

While the cost of disability insurance changes depending on your age, occupation and benefit level, waiting period, and company, you should expect to pay between 1% to 3% of your annual salary.

Generally speaking, rates get higher when you increase the benefits you would get from a long-term disability insurance policy. Basically, the higher your income, the more you'll pay for long-term disability insurance to cover it.

Annual salary

Cost of long-term disability insurance


$63 to $188 per month


$83 to $250 per month


$104 to $313 per month


$125 to $375 per month


$146 to $438 per month


$167 to $500 per month


$188 to $563 per month


$208 to $625 per month


$229 to $688 per month


$250 to $750 per month

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Who has the best long-term disability insurance?

The best long-term disability insurance company depends on your occupation, where you live, how much and what kind of coverage you need, and other factors.

Some companies specialize in providing long-term disability insurance to certain types of workers or to people earning some amount of money. For example, Principal and MassMutual tend to be better for people with a high net worth, and Assurity is better for people with manual jobs.

If you’re not sure how to pick a disability insurance policy, a licensed agent at Policygenius can help you find the best long-term disability insurance company.

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Frequently asked questions

Should you get disability insurance?

Disability insurance is best for people with very specialized jobs that involve a lot of training, like surgeons, pharmacists, doctors, and lawyers. We suggest getting disability insurance if you wouldn’t be able to pay for your expenses if you were out of work for several years. Long-term disability insurance can help you avoid bankruptcy or foreclosure after you’re disabled.

What qualifies as a long-term disability?

A long-term disability lasts three months or longer. Whether or not you qualify for your policy’s definition of disability may depend on if you purchased own-occupation disability insurance or any-occupation disability insurance.

When does long-term disability begin?

Long-term disability benefits begin after the elimination period, which is usually (though not always) 90 days. Short-term disability benefits pay out immediately, but they don’t last as long.

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of oureditorial standards.

  1. Council For Disability Awareness

    . "

    Chances of Disability

    ." Accessed September 15, 2021.

  2. American Public Health Association

    . "

    Medical Bankruptcy: Still Common Despite the Affordable Care Act

    ." Accessed September 15, 2021.


Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.


Anna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at, as well as an associate writer at The Dodo.

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