Disability insurance that provides income replacement for extended periods — typically two years, five years, or until retirement age — after the elimination period ends. It usually replaces 50% to 70% of your pre-disability income and is available through employers or individual policies.
Related Terms
Disability Insurance
Insurance that replaces a portion of your income if you are unable to work due to illness or injury. Short-term disability covers weeks to months, while long-term disability can provide benefits for years or until retirement age. It is one of the most important yet often overlooked forms of insurance.
Elimination Period
The waiting period between when a disability begins and when insurance benefits start being paid. Elimination periods typically range from 30 to 180 days for long-term disability policies. A longer elimination period means lower premiums but requires you to cover expenses longer on your own.
Short-Term Disability
Disability insurance that provides income replacement for a limited time, usually three to six months, while you recover from an illness or injury that prevents you from working. It typically replaces 60% to 70% of your salary and has a short elimination period of 0 to 14 days.