How long do long-term disability insurance benefits last?


How long your disability insurance benefits last depends on the details of your policy. The benefit period could last for years or even decades.

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Long-term disability insurance offers income protection for when you can’t work for a long period of time — many months, years, or even decades. If an injury or illness keeps you out of work, long-term disability insurance can pay benefits until you recover or until you reach retirement age, depending on your policy.

How long-term disability benefits work

When you are applying for long-term disability insurance, there are two things you need to decide: the length of your elimination period and the length of your benefit period.

The elimination period, also known as the waiting period, is how long you have to wait after become disabled before you start receiving benefits. Elimination periods can be 30, 60, or 90 days, or even 6 months or a year.

The benefit period is the period during which benefits are paid out. You can choose a plan that pays out benefits for two years, five years, 10 years, or until retirement.

The right length of each period depends on your own financial needs, what other insurance products you have, and what you can afford.

How to choose the right elimination period

Your benefits won’t start until after the elimination period ends. You need to remain disabled for the entirety of the elimination period in order to receive benefits.

This ensures that your disability really is long-term and that making a claim on your long-term disability insurance is appropriate for the situation. It also keeps your long-term disability benefits from overlapping with any short-term disability benefits you're getting.

Most elimination periods last between 30 days and a year. The right period for you depends on how much you want to spend on your policy and how long you can afford to wait for benefits to begin.

Benefits of a shorter elimination period

The main reason to choose a shorter elimination period is if you know you won't be able to keep up with your expenses during a longer elimination period. The catch is that you'll pay more to have the shorter elimination period in your policy.

Benefits of a longer elimination period

A longer elimination period means lower premiums. If you can only afford so much for long-term disability insurance, you may need to pick a longer elimination period.

You should find the right balance of premium payments versus elimination period length that works for you. Most long-term disability insurance policies are the most cost-effective with a 90 day elimination period, so opting for a longer elimination period likely won’t be worth it.

Many people are able to get some financial support during the elimination period with a short-term disability policy, which has shorter elimination periods and pays benefits for a much shorter amount of time.

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How to choose the right benefit period

Once you’ve made it through the elimination period and start to get long-term disability insurance benefits, your income is protected and you’ll have money coming in so you can pay bills even when you can’t work.

Most long-term disability insurance policies pay out for two, five, or 10 years, or until retirement. A five-year benefit period is typically enough to cover people; according to the Council for Disability Awareness, the average individual disability claim lasts for a little under three years.

But because five years will cover most people, the cost of long-term disability insurance isn't much higher for longer benefit periods. That means that applying for a policy that will last you until retirement won’t cost much more per month, and you get the added benefit of peace of mind in the event (knock on wood) that your disability lasts longer than expected.

When "until retirement age" is the right benefit period

Having long-term disability insurance cover you until retirement age is particularly good for certain professions. Specialty professions that rely on a particular set of skills, like doctors, dentists, or nurses who need fine motor skills for procedures, benefit from until-retirement long-term disability insurance as a safeguard against future income loss if their disability prevents them from using those skills.

Additionally, if you have accrued a lot of debt, you can benefit from from long benefit periods so you can still pay make payments even if you can’t continue in your expected career.

If you can afford the modest rate increase, springing for a long-term disability insurance policy that will last until retirement is a good option.

Whatever you opt for in your specific policy, make sure you understand exactly how long your long-term disability insurance benefits will be in place. If you reduce the potential for unknowns, it’ll make a difficult time go more smoothly.