Group Long term Disability (LTD) is an employer provided benefit that is designed to assist an employee in replacing income lost as a result of a disability. (Once your STD benefits expire (generally after three to six months), the LTD policy pays you a percentage of your salary, usually 50, 60, or 66 2/3 percent. You then receive benefits until you reach age 65.)
The method in which most insurance companies use to calculate the percentage of replaceable income usually falls in the range of 60% of gross income. The goal being that the LTD plan is designed to replace a portion of an employees lost income that is close to the employee's after-tax take home pay. The following
are some provisions that make up the bulk of a Long term Disability contract.