What happens to long-term disability if you lose your job?

The impact on your long-term disability (LTD) benefits if you lose your job depends on various factors, including the specific terms and conditions of your LTD policy, the reason for your job loss, and the applicable laws in your jurisdiction. Here are some common scenarios to consider:

Continuation of Coverage: If your LTD policy is provided through your employer, some policies may allow you to continue coverage for a period of time (typically for a limited duration, such as 30 days) after you lose your job. During this period, you may have the option to convert your group LTD coverage to an individual policy, but this may come with higher premiums.

Eligibility for Benefits: To receive LTD benefits, you typically need to meet certain eligibility criteria, such as being unable to perform the duties of your own occupation or any gainful occupation due to a qualifying disability. Losing your job itself does not necessarily impact your eligibility for benefits if you remain disabled according to the terms of your policy.

Notification: It’s essential to inform your LTD insurance provider promptly if you lose your job. They will need to know about the change in your employment status and any severance or other income you may receive as a result of your job loss.

Termination of Coverage: In some cases, your LTD coverage may terminate upon losing your job if it was provided as an employee benefit. This could mean the end of your LTD benefits if you don’t take steps to convert to an individual policy or find alternative coverage.

New Coverage: If you secure a new job with LTD coverage, you may be covered under the new policy, but there may be waiting periods and limitations, so it’s essential to review the terms of your new coverage.

Impact of Other Income: Any income you receive, such as severance pay, pension, or Social Security Disability Insurance (SSDI) benefits, may affect the amount of LTD benefits you are entitled to, depending on the terms of your policy.

Legal Protections: Laws regarding LTD benefits vary by jurisdiction, and some jurisdictions may have laws that protect your right to continue receiving LTD benefits or obtaining alternative coverage if you lose your job. It’s advisable to consult with an attorney or insurance expert who is familiar with the laws in your area.

To understand the specific impact of losing your job on your LTD benefits, it’s crucial to review your LTD policy’s terms and conditions, and consider consulting with your employer’s HR department or an attorney specializing in disability law. Additionally, communicating with your LTD insurance provider is essential to ensure that you are following the correct procedures and making informed decisions regarding your coverage.