What Makes You Eligible for Long-Term Disability (LTD) Benefits?

Long-term disability policies differ in their eligibility requirements, depending on the company that provides the policy, whether it is a group or individual policy, and how much it costs. Generally, however, you are eligible to receive long-term disability benefits when the insurance company determines you have a physical or mental impairment that has resulted in a loss of a portion of your income (and when you have satisfied any other requirements of your LTD policy, such as working at least 30 hours per week, and have made it through the waiting period).

Under some LTD policies, you are eligible for disability benefits if you can no longer work in your "own occupation." This means you can take a job working at another company, as long as the position is different than the job you can no longer do, and still receive LTD benefits. However, the insurance company will only pay you the difference between what you were making at the job you can no longer do and what you are making now. This commonly happens if the claimant (the person applying for benefits) is able to work only part-time hours, if the insurance company allows payments for "partial disability"; the insurance company will pay enough benefits so that the claimant is making the same amount as he or she was before becoming disabled.

Under other LTD policies, you are eligible for disability benefits only if you can do "any occupation," meaning you can't do any work at all. Fewer claimants are eligible under this type of policy, because there are usually simple, sedentary jobs that even claimants with physical or mental impairments can do.

There are also reasons that the insurance company may find you ineligible for benefits even if you meet its definition of disability. For example, most LTD policies exclude coverage for a "pre-existing condition," which is usually defined as a medical condition for which you've received medical treatment in the past three months. Also, workplace accidents are not always eligible for LTD coverage, and some policies exclude claimants over 65 years of age from their eligibility requirements.

Unfortunately, filing a claim for long-term disability benefits is not always easy. Typically, a long-term disability insurer will not go out of its way to explain the provisions of your long-term disability plan or even the definition of disability that is used by the insurer. By giving you as little information as possible on eligibility, the long-term disability insurer can develop "the record" as it chooses, making it easier to deny your claim and harder for you to eventually win your LTD benefits on appeal.

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