Long and Short Term Disability Insurance

Disability insurance is different from Social Security Disability.

If you are disabled you may be able to obtain Social Security Disability benefits from the Social Security Administration. These benefits are distinct from benefits of a disability insurance policy from your employer or purchased privately. Most people have disability insurance policies that have been provided by their employers. These policies provide that after an exclusion period an individual may qualify for either short-term disability or long-term disability benefits.

The length of these benefits is set by the policy or plan but generally long-term disability benefits are available until age 65. This, however, may depend on when disability was applied for or when the policy took effect.

Short-Term and Long-Term Disability

With short-term disability an individual qualifies to receive benefits for a short period of time, generally up to six months. Individuals on short-term disability remain as employees and often return to work.
Long-term disability benefits are available for individuals whose disability makes them incapable of performing the material duties of their occupation even with an accommodation to make the work environment amendable to the disability.

Types of Disability Policies

Generally there are two types of long-term disability policies, "own occupation" and "any occupation for which one is qualified by education and experience."In an "Own Occupation" policy an individual must be incapable of performing the material duties of his/her occupation. Typically, these policies are purchased by professionals, such as physicians, whose occupation involves a specific capability and/or whose income is considerable. With these policies, if an individual cannot perform the exact occupation for which he/she applied then that person will be awarded benefits regardless of whether the individual can function in a related field. For example, a neurosurgeon who purchases an own occupation policy but has an injury to his hand will likely qualify for benefits even if he can practice neurology but not neurosurgery. "Any Occupation for Which One Is Qualified by Education and Experience" policies are generally provided by employers and typically allow an individual to qualify for disability for the first two years if he/she cannot perform the material duties of his/her occupation.


However, after that time an individual will only qualify for continued benefits if he/she cannot perform the material duties of any occupation for which he/she is qualified by education and experience, even if the individual remains unable to function in the original employment and even if this means a significant cut in salary.

Disability Benefits for Mental Illness

Typically, long-term disability policies limit benefits for mental illnesses to two years, regardless of how incapacitating is the illness and how disabled an individual is from returning to work.

Social Security Disability and Long-Term Disability

It is not necessary to qualify for Social Security Disability to qualify for long-term disability. However, it may be helpful to be on SSD to demonstrate to the insurance company that you are, indeed, disabled.

Note that long-term disability insurers generally make individuals apply for Social Security Disability and subtract SSD benefits from any long-term disability benefits.