Long term disability insurance: what conditions qualify?
If you're thinking of getting long term disability insurance - or filing a claim - here are five things you should know.
Do you have a health or medical condition and want to know if you can get long term disability benefits? A quick search for "What qualifies as a long term disability?' will show a number of sources that claim to list which medical conditions qualify for long term disability benefits. But intentionally or not, many of these sources are missing the larger point: Disability insurance generally doesn't "cover" a specific medical diagnosis – it covers your ability to work. In fact, it's sometimes called "Disability Income Insurance” because when you can’t work and earn income, it can pay monthly benefits that replace much of your income – for many years if needed – helping you meet financial obligations and maintain your lifestyle.
Disability insurance can be a powerful tool to protect your family’s financial well-being. But whether you’re thinking about filing a long term disability claim – or buying a policy – here are five things to know about how long term disability benefits and coverage work:
1. Many disability policies don’t provide long term coverage
A lot of people get disability plans because disability benefits replace a portion of their earnings if they can't work due to a covered condition. But if you have a long-lasting disability, it's important to know that not all policies provide benefits that last for more than a year. There are two basic types of disability insurance coverage – short-term disability insurance (STD) and long-term disability insurance (LTD). Most disability is temporary, keeping a person out of the workplace for under a year. These are covered by STD policies which typically have a "benefit period" (i.e., the amount of time they pay benefits) for up to 6 months and almost never more than a year.
For benefits that last longer than a year, you need to have long term disability insurance, which is not as common as short term disability coverage. Unlike STD, which people often get through work, long term disability coverage is often purchased as an individual insurance policy, although some workplaces also offer it as a voluntary (employee-paid) benefit.
Workers’ Compensation benefits are not disability benefits
Workers’ Compensation only pays benefits for job-related conditions, like a workplace injury. However, most disability is caused by illness, not accidents. A short- or long-term disability policy generally covers a broader list of qualifying conditions -- and they don't have to be job-related.
2. You need to look at the policy’s definition of disability
No one wants surprises when the time comes to make a disability claim. That’s why every disability policy is a contract that clearly defines when you can start getting benefits, how much you can get, for how long, and under what circumstances. This last part is called the “definition of disability”: a specific definition of what it means to be disabled in order to qualify for benefits.
Short-term plans tend to have a relatively simple definition of disability: if you can't perform the substantial duties of your present job because of illness or injury, you typically qualify for coverage. Since benefits only last a few months, the assumption is you'll go back to your regular occupation when you've recovered.
However, long term disability policies have to address another possibility: what if an injury or illness makes you unable to perform your own occupation, but won’t stop you from practicing any occupation? That’s why some long term disability policies have an own-occupation definition of disability, and others have an any-occupation definition.
Certain types of disability, such as a permanent foot injury, might keep you from doing parts of your job that require mobility. However, with a bit of retraining, you may be able to perform many kinds of desk jobs – even within the same organization – for similar pay. If so, a long-term disability insurance policy with an any-occupation definition of disability may provide adequate protection.
However, people with specialized skillsets may need more comprehensive protection. For example, a surgeon who develops arthritis might lose the ability to perform surgery, severely impacting their earning potential – even though they are physically able to do many other kinds of work. LTD plans with an own-occupation definition pay a benefit if you lose the ability to perform “your own,” i.e., regular occupation. Because these policies are more comprehensive, they also cost more than an any-occupation policy.
2. A medical diagnosis doesn’t automatically mean you qualify for benefits
A recent review of articles about how to qualify for LTD benefits1 included the following medical and health conditions:
Cancer Crohn’s disease Degenerative disc disease Fibromyalgia HIV/AIDS Lupus Multiple sclerosis (MS) Stroke Epilepsy Migraines Peripheral neuropathy | Bell’s Palsy Depression Anxiety Bipolar disorder Post-traumatic stress disorder Personality disorders Asthma Chronic lung disease Kidney disease Heart disease | Huntington’s Disease Osteoarthritis Parkinson’s Disease ALS Deafness or hearing loss Blindness or vision loss Certain long-term injuries Chronic pain Chronic fatigue |
All these conditions have the potential to seriously impact one's health and warrant ongoing monitoring or treatment. But in many cases, they won't necessarily keep you out of work – or at least keep you from working long enough to qualify for long-term disability benefits.
Consider the first condition on the list: cancer. A diagnosis is always worrisome to say the least, and if not cured or controlled with treatment, it can obviously lead to a disability that keeps a person from working. But there are innumerable forms of the disease, and according to the American Cancer Society, many common types have high survival rates of over 90%2. And with advances in cancer treatment (as well as many other conditions listed), it is often possible to control or even cure a serious ailment in less time than it takes for an LTD policy to start paying benefits after the typical six-month waiting period. To cite just one example: a popular prostate cancer treatment called SBRT (Stereotactic Body Radiotherapy, also known as CyberKnife) can treat many cases in just 5 daily sessions of 20-30 minutes3. That’s one week of missed work, which is generally covered by regular sick days, not disability leave.
On the other hand, if you want coverage that pays benefits based on a medical diagnosis – as opposed to your ability to work – there are two kinds of supplemental health insurance coverage you may want to look into. Cancer insurance pays lump-sum benefits for diagnoses and many types of cancer treatment, and critical illness insurance pays similar benefits for a broader range of conditions, including heart disease, stroke, and other serious illnesses. However, neither type of insurance is designed to provide the kind of ongoing income replacement that disability insurance can provide.
4. You have to file a claim to get benefits. Here’s what to expect.
Even if you have disability coverage through work – and your employer knows you have a disabling condition – it’s important to know that benefits never start automatically. You have to file a claim, and the sooner you do so, the sooner the disability insurance company can begin evaluating your eligibility for benefits. The policy should provide clear information on how to start a claim, and you should be prepared to sign an "Authorization to Obtain Information" form that will let the insurance company get the medical records and other information they need from your healthcare providers. Every disability situation is different, and depending on the nature of your employment and condition, other types of information may be needed as well. To better understand the claims process, you can refer to this guide to filing a disability claim with Guardian.
5. If you pay Social Security taxes, you may qualify for Social Security Disability Insurance (SSDI) benefits
SSDI is a government-sponsored disability insurance program that is paid for by a portion of your Social Security taxes. However, paying into Social Security doesn’t automatically qualify you for coverage. You also need to have earned a sufficient number of Social Security work credits over 40 quarters of work, or 10 years, although there are some exceptions for younger workers.
Assuming you’re eligible for SSDI, there are a number of issues you should know about: The Social Security Administration (SSA) has a strict any-occupation definition of disability that covers a specific and limited set of severe medical conditions listed in the SSA’s Blue Book. That means that SSDI only pays benefits for long-lasting or permanent medical issues that make you incapable of doing any work of any kind. If you’re a teacher, a plumber, or a brain surgeon, it doesn’t matter if a disability prevents you from working in your field – you will not qualify for SSDI benefits as long as you are physically able to hold any job, no matter how unskilled or low-paying.
The process of getting SSDI benefits is notably stringent. The initial application requires extensive documentation and can take months to complete – and about 2/3 of these claims are rejected4. While the initial decision can be appealed, the process can stretch out for years. However, if your claim is accepted, you'll start receiving payments once the elimination period is over and the average monthly benefit is under $1,2004.
How to get the disability coverage you need
If you can get disability insurance through work (especially for STD), start there. If long-term coverage isn't offered, consider speaking with a financial advisor or broker to get the disability protection you need. Ensure that the professional is familiar with the specifics of buying individual long term disability insurance – If you don’t know one, a Guardian financial advisor can help you. Tell your advisor as much as you can about your financial situation and concerns so that they can start looking into the plans and options that cover the things that are most important to you.
1 Based on a Google search of top-ranking results for the terms “What qualifies as long term disability” and “Long term disability qualifications” conducted in July 2023.
2 https://cancerstatisticscenter.cancer.org/#!/
3 https://nyulangone.org/locations/cyberknife-center
4 https://www.policygenius.com/disability-insurance/is-social-security-disability-insurance-worth-it/ accessed July 2023
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. This material is intended for general use. By providing this content The Guardian Life Insurance Company of America and your financial representative are not undertaking to provide advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity.
Links to external sites are provided for your convenience in locating related information and services.
Guardian, its subsidiaries, agents and employees expressly disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services and make no representation as to the completeness, suitability, or quality thereof.