Long-term disability insurance helps protect your financial security if a qualifying illness or injury leaves you disabled and unable to work for an extended period of time.
1. Purchase benefit through your employer
You can buy this coverage at a lower cost than if you purchase it on your own. The cost of this benefit (known as the premium) is deducted from your paycheck.
2. File a claim
Upon being diagnosed with a qualifying illness or injury, submit an insurance claim to Principal®, along with your medical records or other proof of disability from your doctor, and your employment information. A claim specialist will then contact you, your employer, and your attending physician. Depending on the claim, additional professionals—like a registered nurse or occupational associate—may be included.
3. Receive benefits
Upon approval of your claim, you’ll typically wait 90 days (known as the elimination period) before receiving monthly payments that continue to the end of your policy’s benefit period.
Here’s an example of long-term disability: Frank was diagnosed with amyotrophic lateral sclerosis (ALS). He had previously elected the long-term disability benefit through his employer. After he and his manager discussed his need to stop working, Frank submitted a claim to Principal, which was later approved. His employer paid him his sick leave, while he waited 90 days (known as the elimination period) for his long-term disability benefits to begin.
The monthly disability benefits he received from Principal helped cover his ongoing expenses. Also, due to Frank’s severe medical condition, his claim analyst helped him file for Social Security disability benefits and referred him to the Principal Social Security advocate group for assistance. Frank was approved for Social Security benefits also.
Guaranteed coverage (no medical exam) if you enroll within the first 31 days that you’re eligible for this coverage.
On the Principal® app or at principal.com, you can view and manage your benefits and claims.
Our disability management services teams help you monitor claims, control costs, and return to work as soon as possible.
Every disability policy has a specific definition of what it means to be disabled in order to qualify for insurance benefits. For long-term disability, you’re eligible for benefits if you’re:
- Unable to perform the majority of substantial duties of your own occupation, OR
- Unable to earn 80% of your pre-disability income while working in a modified capacity.
Your “own occupation” is the occupation you were performing when your disability began. The period of time you’re disabled and unable to perform your own occupation is called the “own occupation period.” Once this period ends, you’re considered disabled if you’re unable to perform “any” occupation.
This insurance benefit covers disabilities that are more severe than a short-term disability or even permanent conditions, such as cancer, debilitating injuries, and mental health.
If you become disabled and meet the policy’s definition of disability, long-term disability has a waiting period before you start receiving benefits—typically 90 to180 days. Your employer may allow you to use any paid sick leave and/or any short-term disability benefits before using your long-term disability benefits.
Principal will pay you monthly benefits to supplement your pre-disability income up to the maximum number of years outlined in your policy. This could be until you return to work, for a certain number of years (like up to 5 years), or the age at which you become eligible for full Social Security retirement benefits.
If you have a qualifying disability, you’ll receive a monthly benefit that’s a percentage of your pre-disability income—typically 40% to 60%. Depending on your voluntary coverage (a benefit you pay for), the maximum amount you can receive is up to $10,000 a month, with the option to buy incremental benefits of $500 to $600 per month. Your benefit payments can be used as you wish, including for mortgage, childcare, groceries, medical bills, credit cards, and car loans.
No, disability coverage doesn’t continue after you retire. Long-term disability benefits often end around age 65 or 67 (Social Security retirement age) because the coverage is designed to help replace a portion of your income during disability—not during retirement when you may transition to retirement-income sources.
If you pay for the coverage yourself with after-tax dollars, your long-term disability benefits are not taxable.
If you have a qualifying disability, our Return-to-Work ResourcesSM program is designed to help you get back on your feet and back to work by offering:
- Personal rehabilitation plans. Outlines an individualized plan for you based on input from you, your physician, and your employer.
- Work incentives. Provides you with additional benefits if you return to work part time.
- Rehabilitation incentives. Increases your benefit percentage if you agree to participate in rehabilitation programs.
- Reasonable accommodation benefits. Reimburses you for expenses used to modify the worksite that allows you to return to work.
Yes. If you become disabled and meet the policy’s definition of disability, long-term disability has a waiting period before it starts paying you benefits—typically 90 to180 days. So, your employer may allow you to use any paid sick leave and/or any short-term disability benefits before using your long-term disability benefits.
Here’s an example of how short-term and long-term disability benefits can work seamlessly together: Michelle’s annual mammogram screening identified a lump. After a biopsy, surgery was recommended, followed by chemotherapy and radiation. Michelle had previously elected both short-term and long-term disability coverage through her employer, so she submitted a claim to Principal.
Her short-term disability claim was approved once she stopped working due to surgery. Throughout her recovery period, she and the claim analyst kept in touch—and Michelle received weekly short-term disability benefits from Principal. When Michelle started chemotherapy, she was nearing the end of her short-term disability benefits. So, the claim analyst gave Michelle the forms needed to transition her claim to long-term disability. Michelle submitted the forms to Principal and her claim was approved—with no gap in benefits. She received monthly long-term disability benefits until she completed her treatments and was able to return to work.
Learn more.
Ready to unlock the full potential of your benefits? Talk to your employer or financial professional about benefit costs and how to enroll.
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