Group Long Term Disability (LTD) is an employer-sponsored benefit designed to assist an employee replace income lost as a result of a disability.
The goal of a well designed LTD plan is to replace that portion of an employee’s lost income that approximates the employee’s pre-disability take-home pay.
While we do see some plans designed to replace as little as 50% of gross income, this is probably not realistic since most employee’s living expenses exceed this figure. Most commonly, plans are designed to replace 60% to 66% of gross income, including any income received from NY State DBL, Workers Compensation, or Social Security Disability Benefits.
|Benefit Duration||Benefits are usually payable to age 65 or normal retirement age|
|Elimination Period||Benefits are usually payable after 30, 60, 90, or 180 days of disability|
|Maximum Covered Salary||Frequently, highly compensated executives will discover that only a portion of their income is covered under the LTD Plan. Supplemental Executive Plans must then be implemented to augment the Executives group LTD benefit.|