Disability (Long-term)

Long-term disability insurance is a type of insurance that provides income replacement for a person who becomes disabled and is unable to work for an extended period. Here are some key features of long-term disability insurance:

• Long-term disability insurance is designed to provide income replacement for an extended period of time, typically until retirement age.

• To be eligible for long-term disability benefits, an individual must be unable to perform the duties of their occupation due to injury or illness.

• Disability benefits typically replace a percentage of the individual's pre-disability income, usually ranging from 50-80%.

• The waiting period for long-term disability benefits can range from 30 days to 180 days, during which time the individual must be unable to work due to their disability.

• The benefit period for long-term disability insurance is usually 2, 5, or 10 years or until the individual reaches retirement age.

• The definition of disability varies among insurance policies, but typically requires the individual to be unable to perform the duties of their occupation for a certain period of time.

For example, let's say that John is a surgeon who has a long-term disability insurance policy. He injures his hand in a car accident and is unable to perform surgeries for an extended period. Because he is unable to perform the duties of his occupation, he qualifies for long-term disability benefits. His policy has a waiting period of 90 days and a benefit period until age 65. The policy provides a benefit of 60% of his pre-disability income.

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