Long-term disability (LTD) pays a portion of your income if you cannot work due to illness or injury, usually starting after a waiting period of 90 days or more and continuing until you reach retirement age, return to work, or no longer meet the program's definition of disabled.

Long-term disability is an insurance product, not a government program. Your employer typically buys the policy and deducts premiums from your paycheck, though some employers pay the full cost. The insurance company—not your employer—decides whether you meet their definition of disabled and how much to pay you each month.

The amount you receive is usually 50 to 70 percent of your gross salary, capped at a maximum monthly benefit that varies by plan. The waiting period before payments begin (called the elimination period) is typically 90 days, meaning you must be unable to work for at least three months before the first check arrives. Some plans have shorter or longer elimination periods—check your employee handbook or benefits summary to find yours.

Key Takeaways

  • Long-term disability is an insurance benefit paid by your employer's insurance company, not Social Security or a government agency.
  • You must wait through an elimination period—usually 90 days—before payments begin, and you cannot work during this time.
  • Monthly payments are typically 50 to 70 percent of your salary, with a maximum amount set by your specific plan.
  • The insurance company requires medical documentation proving you cannot perform your job duties, and they may request updates or independent medical exams throughout your claim.
  • If you return to work part-time or your condition improves, your benefits may be reduced or end, depending on your plan's terms.

How the Elimination Period Works

The elimination period is the number of days you must be unable to work before long-term disability payments start. During this time, you are responsible for your own income—some people use paid time off, short-term disability, or personal savings. The most common elimination period is 90 days, but plans vary from 30 days to 180 days or longer.

The clock starts on the date your doctor says you cannot work, not the date you file a claim. If you go back to work for even one day during the elimination period, the clock typically resets. This is why it matters to understand your plan's exact terms before you need to use it: a 90-day elimination period means roughly three months with no income from this benefit.

Short-term disability (if your employer offers it) often covers the elimination period. Short-term disability usually pays 60 to 100 percent of your salary for 3 to 6 months, then long-term disability takes over. If you have no short-term plan, you must cover those first 90 days yourself.

What the Insurance Company Needs to Approve Your Claim

When you file a long-term disability claim, the insurance company will ask for medical records, a statement from your doctor describing your condition and work limitations, and details about your job duties. They use this information to decide whether you meet their definition of disabled—which is usually "unable to perform the material duties of your occupation" rather than unable to work at any job.

This distinction matters. If you are a surgeon with a hand injury, you may may have access to for long-term disability even though you could work as a consultant. If you are a general laborer with the same injury, the insurance company may deny the claim if they believe you can do desk work. Your plan's definition of disability is in your benefits document—read it before you file.

The insurance company may also request an independent medical examination (IME) at their expense. They will send you to a doctor of their choosing to verify your condition. This is standard practice and does not mean they doubt your claim; it is how they verify information before committing to years of payments.

How Much You Receive Each Month

Your monthly benefit is calculated as a percentage of your gross salary—typically 50, 60, or 70 percent depending on what your employer's plan offers. If you earn $4,000 per month and your plan pays 60 percent, your monthly benefit would be $2,400 before taxes and offsets.

However, most plans include an offset clause, which means your long-term disability payment is reduced by other income you receive. Common offsets include Social Security Disability Insurance (SSDI), workers' compensation, other disability insurance, and sometimes unemployment benefits. If you receive $800 per month in SSDI, your long-term disability check may be reduced by that amount.

Plans also set a maximum monthly benefit—for example, $5,000 per month regardless of your salary. If you earn $10,000 per month, you would receive the $5,000 maximum, not 60 percent of your salary. Ask your human resources department or benefits administrator for your plan's specific percentage, maximum, and offset rules.

Ongoing Requirements While Receiving Benefits

Once your claim is approved, you must continue to prove you are disabled. The insurance company will ask for updated medical records, usually every 6 to 12 months. You must see your doctor regularly and follow their treatment recommendations—if you stop treatment without a medical reason, the insurance company may deny your claim.

You cannot work while receiving long-term disability, with limited exceptions. Some plans allow part-time work or work-related training if your earnings stay below a certain threshold, but this varies widely. If you work and earn income, you must report it to the insurance company; failing to do so can result in overpayment recovery or claim denial.

If your condition improves or your doctor says you can return to work, your benefits will end. The insurance company may require a trial work period where you return to your job and they continue paying you for a set time (often 30 to 90 days) to see if you can sustain work. If you cannot, benefits resume.

When Long-Term Disability Ends

Long-term disability continues until one of four things happens: you return to work, your condition improves and you no longer meet the definition of disabled, you reach your plan's maximum benefit period (often age 65 or 67), or you die. The maximum benefit period is set by your specific plan and is stated in your benefits document.

Some plans have a maximum duration of two years, five years, or until age 65. Others pay until age 67 or for your lifetime if you became disabled before age 55. These rules vary significantly, so check your plan details or ask your benefits administrator what your maximum period is.

If you are receiving long-term disability and you reach retirement age, your benefits typically end and you become responsible for filing for Social Security retirement benefits or a pension if you have one. The insurance company will notify you in advance of this transition.

Long-Term Disability vs. Social Security Disability Insurance

Long-term disability and Social Security Disability Insurance (SSDI) are separate programs with different rules. Long-term disability is an insurance benefit from your employer; SSDI is a federal program. You can receive both at the same time, but your long-term disability payment will usually be reduced by the amount you receive from SSDI (this is the offset mentioned earlier).

SSDI has a five-month waiting period before payments begin and requires that you have worked and paid Social Security taxes for a certain amount of time. Long-term disability has no work history requirement—if your employer's plan covers you, you are covered. However, SSDI continues indefinitely if you remain disabled, while long-term disability usually ends at a set age.

Many people file for both benefits at the same time. Your long-term disability claim moves faster (usually 30 to 60 days), while SSDI can take several months or longer. Some people receive long-term disability first, then transition to SSDI when their long-term benefit period ends.

What Happens If Your Claim Is Denied

If the insurance company denies your claim, they must provide a written reason. Common reasons include: your condition does not meet their definition of disabled, your medical records do not support your claim, you did not follow your doctor's treatment plan, or you did not provide complete information.

You have the right to appeal a denial. The appeal process is outlined in your plan's document and typically involves submitting additional medical evidence, a written statement explaining why you believe you are disabled, and sometimes a request for a review by a different person at the insurance company. Appeals can take 30 to 90 days.

If the insurance company continues to deny your claim after appeal, you may be able to file a complaint with your state's insurance commissioner or pursue a lawsuit, though this requires an attorney. Before you reach that point, ask your employer's benefits administrator or a disability advocate to review your case and help you gather stronger medical evidence.

Frequently Asked Questions

Do I have to pay taxes on long-term disability benefits?

If your employer paid the premiums for your long-term disability insurance, your benefits are taxable income and you will owe federal and state income tax on them. If you paid the premiums with after-tax dollars, your benefits are usually not taxable. Check your pay stub or ask your benefits administrator who paid the premiums for your plan.

Can I receive long-term disability if I was injured outside of work?

Yes. Long-term disability covers illness and injury regardless of whether it happened at work. Workers' compensation covers only work-related injuries and is a separate program. If you were injured at work, you may receive both workers' compensation and long-term disability, though offsets may explore.

What if I improve during the elimination period—do I have to start the clock over?

If you return to work during the elimination period and then become unable to work again from the same condition, most plans will not restart the clock. However, if you return to work and then become unable to work from a different condition, a new elimination period typically begins. Check your plan document for the exact rule.

Can the insurance company cancel my benefits if my condition is stable?

No, but they can end your benefits if your condition improves enough that you can return to work. A stable condition that still prevents you from working is not grounds for cancellation. However, the insurance company may require periodic medical exams to confirm you still cannot work.

What happens to my long-term disability if I change jobs?

Your long-term disability coverage ends when you leave your employer, because the policy belongs to your employer, not to you. Your new employer may offer a different long-term disability plan, but there is typically a waiting period (often 30 to 90 days) before coverage begins. If you become disabled during that gap, you will not be covered.