Life & Disability
Long-Term Disability
The optional, employee-paid Long-Term Disability (LTD) coverage provides tax-free income after you have been disabled for 26 weeks. Benefits continue to age 65 if you remain disabled.
You have three options for LTD:
LTD benefits may be reduced by other income such as Social Security benefits or Workers' Compensation. The minimum benefit is $100 per month. The maximum benefit is $20,000 per month.
If you should become disabled and are approved for benefits, they are tax-free — because you have paid for the coverage yourself through after-tax contributions. Typically, this means a 50% benefit equates to income replacement of approximately 65% or more, and a 60% benefit equates to income replacement about 75% or more, depending on your marginal tax rate.
NOTE: You can enroll in the LTD Plan any time. However, if you decide to enroll in the LTD Plan after your
initial period of eligibility (i.e., when you're newly hired or newly eligible for coverage), you will be required to
provide evidence of insurability.
Cost of Coverage
You pay the full cost through after-tax deductions from your pay. Contributions are based on the option you choose and
your annual base pay. Exact costs are shown on your Benefit Option Worksheet.
If your base pay changes during the year, your LTD contributions will automatically be adjusted to reflect the new base pay.
Why Buy Long-Term Disability Insurance?
Long-term disability can have a drastic financial impact on a family. Not only does the disabled person's income stop, but expenses
usually increase because of the need for more medical and rehabilitation costs. Without LTD Insurance, you may have no other source of income.
Are You Protected? Consider These Facts
More than 375,000 Americans become totally disabled every year.
Disabilities cause nearly half of all foreclosures on conventional mortgages, compared with only 2% caused by the homeowner's death.
About 30% of Americans ages 35-65 will suffer a disability lasting at least 90 days during their working careers.
About 1 in 7 people ages 35-65 can expect to become disabled for five years or longer.
If you have saved 10%, one year of being totally disabled could wipe out 10 years of savings.
For more information, see MyBenefits Online.