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Insurance for long-term medical disability is financial insurance. It doesn’t pay for medical costs. Rather it pays you a monthly sum to replace lost income that you would have had if you weren’t disabled. Often, you will sign up for this through your job; you may already be enrolled. You’ll pay a premium (and if it’s through your job, it’s often taken out of your paycheck). The benefits kick in once you tap out your short-term disability. You can be covered for LTD until your 65th birthday -- no exceptions.
Short-term disability is fairly inexpensive, but long-term disability insurance can be pricey if you need to buy it yourself.
So, before you decide to purchase this kind of insurance, consider alternatives like a health savings account (HSA), mutual funds, or other savings. You can also apply for benefits under Social Security.
Medical long-term disability insurance will pay a set amount if you become ill or disabled and can't work. Some insurance policies pay benefits if you can't perform your routine work-related duties. Other companies will pay only if you can't do any work at all. Some policies require that you must be completely disabled to receive compensation. Other plans may pay if you are partially disabled for a set amount of time. Usually, medical long-term disability will extend from two to five years or until you turn 65. Most medical long-term disability policies don't require you to pay premiums if your disability lasts for three months or longer.
Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.