Long Term Disability benefits are often referred to as income replacement benefits. That is because these benefits replace lost income if you are unable to work due to injury or chronic illness for a period of months or even years. Most employers offer short term disability policies, along with long term disability policies. Most usually, long term policies will replace around 60% of your lost income, which lasts for a set time frame or until retirement age. The most commonly claimed disabilities result from cancer, pregnancy, mental health conditions, and musculoskeletal disorders.
Many traditional employers offer short term disability income replacement themselves, but that usually only replaces income, or partial income, for around three (3) months, and for some policies up to six (6) months. Unlike social security disability benefits, private and group long term disability policies offer benefits, with valid claims, that can bridge the gap a little tighter as benefits are usually more substantial with long term disability benefits.
How Much of My Salary do Disability Insurance Benefits Replace?
However, it is important to remember that while Long Term Disability benefits are considered income replacement in the event of your injury or chronic illness, they are usually only 60% of your base salary, or however defined within the particular policy. There are tax consequences at play, potential ‘other income’ and social security disability offsets that lower your expected benefit amount and which must be taken into consideration. In this way, your income is not entirely replaced, but rather, only a fraction of it. While receipt of some money during the time you are disabled is beneficial, it may not be enough to effectively “bridge the gap” in order for you to make ends meet.
Do You Need Help with a Long Term Disability Claim?
If you are concerned about securing your income stream in the future in the event of your becoming unable to work due to injury or chronic illness or need help securing your Long Term Disability benefits after becoming disabled, give our office a call. We have the experience you need to be successful in protecting your earnings during this time.
