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’re hurt or sick and can’t work — whether it’s for two years or 20 years. Without 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 is 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 cover things like:

  • An illness that causes you to lose your sight

  • Severe anxiety or depression that keeps out of work

  • 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. You typically 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 with a pre-existing condition, but it would be excluded from coverage. 

Every disability insurance policy also has exclusions, meaning certain kinds of illnesses or injuries that aren't covered, 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

When can you use your disability insurance?

You can use your disability insurance if you're hurt or sick and can't work. With short-term disability insurance, you may be able to start collecting benefits as soon as 14 days after you’re first injured or ill. If you have long-term disability insurance, you’ll have to wait at least 90 days before you can collect any benefits.

An "own-occupation" policy is the most comprehensive type of coverage. It allows you to collect payments even if you go back to work in a different job, as long as you’re still unable to do the work you were doing when you bought the policy. An "any-occupation" policy means you can only get benefits if you can’t work at all.

Own-occupation policy

Pays out if you can’t work your original job, even if you can work in a different field, like if you can’t practice as a doctor anymore but you get a job consulting.

Any-occupation policy

Pays out only while you can’t work at all, and benefits end once you get another job, even if it pays less than your original role.

Two-year own-occupation policy

Pays out like an own-occupation policy for the first two years, then changes and only pays benefits if you can’t work at all.

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’d file a claim with your disability insurance company. You’ll have to 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.

You can use your disability insurance benefits just like you use your regular paycheck — meaning you can use disability insurance to cover whatever you need, whether that’s:

  • Mortgage payments

  • Car loan payments

  • Childcare

  • Utility bills

  • Medical bills

  • Groceries

How much you get depends on your policy, but usually disability insurance pays out a percentage of your income, like up to 60% of your pre-tax earnings. 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.

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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Who should get long-term disability insurance?

You may need long-term disability insurance if you have a high-paying job or a career that requires lots of schooling or training and you want to protect that investment. Careers that make for good long-term disability candidates include:

But disability insurance can be useful no matter what your job is. 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 vs. other types of disability insurance

Long-term disability insurance provides the most protection over the longest time, but there are other types of disability insurance that you might want in addition to long-term coverage.

  • Short-term disability insurance: Short-term disability insurance is similar to a long-term policy, except coverage lasts up to a year at most. You can use short-term disability insurance before your long-term policy kicks in.

  • Employee-sponsored disability insurance: You may get disability insurance through your work as an employee benefit. But it’s usually short-term coverage, and it’s tied to your continued employment.

  • Social Security Disability Insurance: You can get Social Security Disability Insurance (SSDI) through the government if you qualify. Even though it’s free, qualifying can be hard and benefits are very low compared to other types of disability insurance.

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 you want the waiting period to be.

  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 — be sure not to misrepresent yourself on your policy.

  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?

Long-term disability insurance usually costs between 1% and 3% of your annual salary. 

Generally speaking, rates get higher when you increase the benefits (meaning the payments) 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, while others are better for people with manual jobs. Here are some of our top picks for the best long-term disability insurance:


BBB rating

AM Best score

What we like about it …




Includes a survivor benefit for your beneficiary.




Partially reimburses your COBRA medical payments if you lose your job health insurance benefits because of a disability.




Offers lifetime continuous benefits for total disabilities, even after the policy expires.

Illinois Mutual



Specializes in coverage for people with manual jobs.

Massachusetts Mutual



Offers a future insurability rider that's good until your 60th birthday.




Covers people who would otherwise be considered high risk because of their jobs or health.




Offers a lump-sum payment of $62,400 in addition to regular benefits if you're presumptively disabled.

The Standard



Includes a family care benefit if you have to take time off to care for a sick loved one.

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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.

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 can be 90 days to a year. 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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