Long Term Disability (LTD)
Monthly income benefits range from 40% to 66 2/3%
of an employee's predisability earnings, although most employers chose
Elimination periods (EP) work like deductibles to
lower your premium. If short-term disability coverage is carried, the EP
normally matches the STD benefit duration to provide seamless coverage.
Otherwise, the EP ranges from three to six months.
Long term disability benefit are normally paid
until the disabled employee reaches age 65 if disability
occurs before age 60. If the disability begins after age 60, a "reducing
benefit duration" schedule applies.
LTD policies normally
define "disability" very broadly for the first two years after
disability, typically stating that the employee must be unable to
perform all of the duties of that employee's job. This is often referred
to as the "own occupation"
After that point, the definition becomes more
restrictive, meaning the employee must be unable to perform the material
duties of any occupation for which he or she might be qualified based on
education, experience or training. This is often referred to as the "any
Chartwell recommends that employers look carefully
at who might be affected by the more restrictive "any occupation"
definition after two year. We usually suggest that a separate class of
employees consisting of key executives be "carved out" and provided with
the better "own occupation" wording until they reach normal
retirement age, not just for the first
two years of disability.For more information, please download "An
Employer's Guide to Disability Income Insurance" offered by the Americas
Health Insurance Plans by
to the general discussion of Employee Benefits.