The first thing many people wonder when they have been afflicted with a disability is: How much will my long-term disability benefit be? The truth is, every policy is very different from the next, so it is sometimes difficult to place a specific dollar amount. Most LTD plans will allow you to collect anywhere from 50-80% of what you were making with your salary. However, not every LTD plan will take your monthly salary into account – sometimes they will provide you with a fixed amount. There are also factors that can slightly influence how much LTD you will receive every month.
Partial Disability: Perhaps, even though you have sustained a long-term disability, you are still able to work – just not as much as last time. You may be making a huge amount less than what you made before you sustained your injury. You may have the opportunity to file for something known as partial disability benefits. Partial disability benefits cover things like compensation for lost wages due to the injury because of having to basically downgrade your job and work less, for less money. If you have qualified for partial disability, your LTD payments will be reduced in proportion to the amount of work you are still able to complete at your job. You could still, in turn, be receiving a decent amount in LTD. at
COLA: Long-term disability takes something known as the cost of living adjustment (COLA) into consideration. This is Social Security’s way of taking a look at the increases in the cost of living. If you have a LTD policy that contains COLA, your benefit amount each month will be measured with inflation in mind. This could leave you with an increase in amount, such as anywhere from 1-3% a year.
Offset: In most cases, if you qualify for LTD, you must apply for other benefits as well – like Social Security Disability. If Social Security finds that you are indeed disabled, they will begin to cover you and your LTD benefits could be reduced. In fact, LTD could take some of your Social Security benefits to balance things out. Either way, you are getting what is owed to you.
Policy Premiums: You will usually not have to keep paying premiums if you receive LTD.
Taxes: You may wonder if your LTD benefits are taxable. This can become a complicated matter. In most cases, your plan will be paid for by your employer, so LTD benefits are treated as taxable income. If you bought the plan yourself, you have a higher chance of not owing taxes.
Sometimes gaining LTD is a difficult concept. You may end up receiving short-term disability insurance for some time before your LTD benefits begin. In other cases, your employer may require that you have worked for them for a certain amount of time before your benefits take place. Because there are so many questions concerning your benefits that you may have, the best thing you can do is turn to an attorney who can help you. Call us at Edelstein Martin & Nelson at 800-300-0909 or 215-731-9900 for more info.