Long Term Disability Guide
What is it, how expensive is it,
and do I need it?
What is Long-Term Disability?
Long-term disability, also known as disability income insurance, is a type of insurance policy used to supplement income.
It provides you and your family with income protection in the case you become unable to work because of an accident, illness, or injury.
What is the Difference Between Long-Term and Short-Term Disability?
The three biggest differences between short-term vs. long-term disability insurance policies are:
1. Disability Income Insurance Coverage Period
Depending on your long-term disability insurance policy, its benefits can last either:
- 2 years
- 5 years
- 10 years
- Until retirement
- Throughout retirement
Whereas, short-term disability insurance does not last nearly that long. At most short-term disability will last two years, but it is more common to last between 3 to 6 months.
2. Disability Insurance Level of Coverage
3. Waiting Period to Collect Benefits
The waiting period for short-term disability is much shorter than for long-term disability. Short-term disability is usually under 14 days, whereas long-term disability waiting period is typically 90 days.
What is the Benefit of Long-Term Disability Insurance?
The biggest benefit of long-term disability insurance is to provide protection in case you lose your income due to:
- Injury
- Illness
- Disability
Do I Need Long-Term Disability Insurance?
No one expects to need long-term disability insurance, and some people may have less income protection than they realize.
Workers’ compensation may provide medical and wage-replacement benefits when an illness or injury is directly related to a person’s job. It generally does not cover disabilities caused by non-work-related illnesses or injuries, and benefits vary by state.
According to the U.S. Bureau of Labor Statistics, private industry employers reported 2.3 workplace injury and illness cases per 100 full-time equivalent workers in 2024, the most recent year available.
In addition, a July 2026 actuarial note from the Social Security Administration estimates that an insured worker who reaches age 20 in 2026 has a 24% probability, just under one in four, of becoming disabled before reaching normal retirement age.
Although no one can predict whether a disability will occur, insurance may help protect a portion of your income if a qualifying illness or injury prevents you from working.
Consider reviewing your current employer-provided benefits and exploring long-term disability insurance to better understand the costs, coverage options, and potential gaps.
Take time to meet with a qualified insurance professional to review your coverage options and costs. When comparing policies, consider the definition of disability, waiting period, benefit amount, benefit period, exclusions, limitations, and whether benefits may be taxable.
Information current as of September 17, 2026. Sources: Social Security Administration, U.S. Bureau of Labor Statistics, and the Council for Disability Income Awareness. Insurance availability, underwriting requirements, costs, and benefits vary by applicant and policy.
What are the Most Common Reasons for Long-Term Disability Claims?
According to the Council for Disability Income Awareness, citing the Integrated Benefits Institute’s 2024 benchmarking data released in late 2025, the most common causes of long-term disability claims are:
-
Musculoskeletal disorders (26%)
-
Cancer (15%)
-
Injuries such as fractures, sprains, and strains (11%)
-
Mental health conditions (9%)
-
Circulatory conditions, such as heart attack and stroke (9%)
Information current as of September 17, 2026. Percentages reflect long-term disability claims included in the Integrated Benefits Institute’s 2024 Health and Productivity Benchmarking data and may not represent all disability claims or insurance policies.
How Much Does Long-Term Disability Pay?
A long-term disability insurance benefit depends on the policy. Coverage typically replaces a portion of your pre-disability income, and the exact percentage is set by the policy.
Pre-disability income generally refers to your earnings before becoming disabled. Depending on the policy, it may include or exclude bonuses, commissions, and overtime.
Benefits may also be subject to a maximum monthly amount. This limit varies by insurer, policy, occupation, and income.
Some policies offer a cost-of-living adjustment, or COLA rider, that may increase benefits after a qualifying disability begins. Increases may be tied to inflation or capped at a fixed percentage, such as 3% annually.
Coverage, limits, riders, and exclusions vary by policy.
When Does Long-Term Disability Start?
Long-term disability starts when the insurance company agrees you meet their definition of disability defined in the policy. The waiting period can range from 90 to 180 days before receiving benefits.
When the long-term disability insurance provider is reviewing your file to determine your long-term disability eligibility, the provider will review your long-term disability policy's definition of disability.
The insurance provider will compare the policy's disability definition with your current situation to determine if you meet the requirements.
How Long Does Long-Term Disability Last?
Long-term disability insurance's payout will last either until you recover from your disability or you reach retirement age.
Is Long-Term Disability Taxable?
Typically, long-term disability income is not taxable, but there are situations in which it is.
If the disability insurance premiums are paid with after-tax dollars, then your long-term disability benefits are not taxed.
However, if your employer is paying for your long-term disability policy, it may be taxable.
Long-Term Disability Insurance Agent
Working with a local Insurance Agent is an important decision that can impact not only your future but your family.
When deciding what insurance agent to work with, be sure the company is an independent agency that does not require specific quotas or products for their advisors to sell or meet.
You want an advisor that can understand your needs and find a product that meets your requirements. not encourage a suboptimal product.
When it comes to insurance, there is no one product that fits all. Each person's case should be discussed to understand:
- What is your situation?
- What are your goals?
- What are your obstacles?
- What plan aligns best to overcome your obstacles and achieve your goals?
Talk to Langan Financial Group's insurance agents to help assess your needs. We are more than happy to review current policies, discuss your concerns, and answer any questions you may have about disability insurance.
Get started today
Contact Us Today
Schedule a Chat with a Long Term Disability Insurance Agent
Langan Financial Group's insurance agents have over 50 years of experience servicing insurance policies for individuals and families.
Give us a call at 717-288-1880 to see how our local agents can help with your insurance policy needs. Or visit our long term disability agent contact page to fill out an inquiry.
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Phone: 717-288-1880
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