Updated: April 17, 2024
Long-Term Disability Insurance
Looking for insurance protection against long-term disability? Read our guide to find out what policies are available and how to get one
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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in long-term disability insurance. Ask us a question and we'll get the best expert to help.
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Are your personal assets protected in case of an emergency that would leave you disabled and unable to work for a prolonged period?
Although no-one likes to consider worst case scenarios, an incident that results in a long-term disability could leave you unable to work for several years or longer. For many people, this would eat away at any financial buffer or even cause their family to become financially destitute.
Some employers may provide long-term disability insurance as part of their benefits package, but if you don’t currently have a policy, it’s often important to set up your own cover.
There’s simply no replacement for having a financial safety net to fall back on.
The following topics are covered below...
What is long-term disability and health insurance?
Standard long-term disability insurance
What does long-term disability insurance cover?
How long does disability insurance last?
How to compare disability insurance cover
Does your employer offer disability insurance?
Is long-term disability insurance worth it?
If you’d like to save time and hassle, skip the reading and talk to an expert advisor about arranging long-term disability insurance. All the experts we work with are independent financial advisors with access to all the insurance providers in the market.
Call 0808 189 0463 or make an enquiry and we’ll match you with an advisor experienced in cases like yours. The service we offer is free and there’s absolutely no obligation.
What is long-term disability and health insurance?
Long-term disability insurance is an insurance policy that protects you from loss of income if you’re unable to work for a prolonged period of time due to an illness, injury, or accident.
If you suffer from a disability and are unable to work, disability insurance will pay a monthly fee to replace any loss of earnings from your salary.
Employers will sometimes provide long-term disability insurance for their employees as part of a comprehensive benefits package. But if your company doesn’t cover you in the case of a long-term disability, you have the option to set up your own long-term disability plan – this is especially important to do if you have a mortgage or your family relies on your regular income.
Even if your workplace covers you with short-term disability benefits, these usually expire after 3 to 6 months. This is where your long-term disability insurance will kick in, paying you a percentage of your salary, usually in the 50-70% range.
A long-term disability insurance policy can provide cover for a defined period of time – often from 2 to 10 years, or until the employee reaches a certain age, for example, 65 years old.
An insurance expert, like the ones we work with, can help advise you on how to match the level of insurance cover and policy length with your needs and individual circumstances.
Get in touch by making an enquiry and we’ll connect you to an experienced insurance advisor who can answer all your disability insurance questions.
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Standard long term disability insurance
If you get injured while you’re at work, your employer will usually compensate for any resulting loss of income. But many jobs won’t cover your full salary if you have a non-work related injury that leaves you unable to work.
Short term disability insurance will generally provide cover for 30 days to a year, but a more serious injury or illness could prevent you from working for longer. In this scenario, standard long term disability insurance will protect you and your family with financial security; paying you a regular monthly fee for the duration of your recovery period.
What are the benefits of getting long term disability insurance?
While health insurance, critical illness, or income protection policies offer some financial security if you become disabled. Critical illness cover will only pay out if your disability is on the list of specific conditions covered in the policy.
Also, while critical illness cover will payout in one single lump sum, disability cover will be paid monthly.
Generally your employer will only cover you for sick pay for a fixed period of time after which you’ll need to fall back on other sources of income. Long term disability insurance offers the benefit of a monthly revenue if you’re rendered unable to work for a prolonged period.
How much you receive per month is calculated as a percentage, often 50-70% of your original salary. It should provide you with enough regular income to give you peace of mind that your family and finances will be well looked after if you were unable to work.
This makes long-term disability insurance especially pertinent for those with a high-risk lifestyle, or for individuals who are the main breadwinners in the family.
What does long-term disability insurance cover?
Long-term disability insurance is designed to insure you against any personal illness or accidents which result in a serious injury, such as a fall or a car collision. It usually won’t cover you for any work-related accidents or injuries – these are often included in workers’ compensation insurance.
The details of which illnesses and accidents are covered by long-term disability will differ from one provider to the next, so it’s important to review the insurers’ terms and conditions to find the policy that best matches your needs.
Getting a payout when you make an insurance claim comes down to having cover for the right set of risks in the first place. To make sure you’re paying for a policy which will deliver when you most need it, it’s important to take expert advice. One of the experts we work with can help you with this.
Contact us for a free, no obligation chat with an insurance advisor who can advise you on which insurance policy would best meet your needs.
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How long does disability insurance last?
Disability insurance benefits will last until you’re fit enough to return to work, or for the period agreed in your policy. Your policy term could run from anywhere between 2 to 10 years, or it could even pay out as long as you are disabled up to the age of 65.
While not all providers will give you the option of purchasing disability cover beyond 65, if you’d like to explore this option, one of the independent insurance advisors we work with can help you find any niche deals on the market. Make an enquiry for a free, no obligation chat.
How to compare disability insurance cover
The best way to compare disability insurance cover is to determine the cost of each plan against the policy benefits. An insurance expert can help advise you on which policy would best suit your needs, how to pick out the right provider, and compare monthly premiums.
When it comes to insurance, you’re not necessarily looking for which one costs less, but the policy that offers the most value for your situation.
A surface level comparison of disability insurance providers won’t be sufficient to secure your best offer; policies that are higher than others often include more riders or provisions. An insurance advisor will understand which extras and provisions would be necessary for you and how to find the better value offer.
Get in touch by making an enquiry and we’ll help connect you to a vetted insurance expert. They will be happy to answer your questions and have the knowledge and the tools required to take the hassle out of comparing long-term insurance policies so you can save time and money.
The service we offer is free and there’s absolutely no obligation to act on the advice you receive.
Does your employer offer disability insurance?
Long-term disability insurance has a waiting period which is designed to kick in after your short term sick leave pay runs out.
With this in mind, one of the first things to find out when considering long-term disability insurance, is whether your employer offers short-term disability cover. For many full-time employees, short-term disability insurance, or sick leave, will come as part of your benefits package.
Find out how long you’d be covered for sick leave – it could be as little as a few days or as much as 1–2 years. Carefully examine your employers’ disability insurance package; ensure your employer hasn’t just bought the cheapest option which leaves you with a short coverage period and fewer benefits.
However, if your employment benefits package doesn’t include short-term disability insurance, you may need to shop around for this yourself. Alternatively, make sure you have a buffer of savings that could see you through for several months until your long-term disability insurance kicks in.
Does my employer cover my long-term disability insurance?
You need to check your employment package to know if you’re insured against long-term illness and disability through your employer.
If you are, next you’ll need to know what percentage of your salary you’d receive if you were to become disabled and how long the policy will last.
Is the monthly payout enough to cover your living costs, to pay off your mortgage, and to care for loved ones? If the answer is no, then you may want to speak to an expert insurance advisor about getting your own long-term disability insurance policy.
Disability insurance is an important piece of building a financial safety net to help protect you during life’s unexpected events. If you and your family are dependent on your income, it’s worth speaking to an expert to find out more about this type of cover.
Speak to an expert today
Is long-term disability insurance worth it?
You may be wondering if long-term disability insurance is worth getting. Before you take out any disability insurance, do some background research to find out what your employment benefits are and how long you are eligible for sick pay.
Are you covered by personal accident cover if you were to suffer a workplace injury? If you have taken out a life insurance policy or income protection insurance, does the policy include critical illness cover?
If you don’t have critical illness insurance, or longer-term disability cover as part of your employment plan, getting long term disability insurance will likely be a worthwhile investment.
What is the deferment period?
The deferment period is the time that you take off work due to a disability before your insurer starts paying out. If you choose to protect your income with disability insurance, you’ll need to agree on how long the deferment period should be and work this into your policy.
It’s important to first find out if you’re entitled to sick pay and how long this will last. You can then set your long-term disability insurance to begin paying out once this initial sick cover ends. Bear in mind that the longer your deferment period, the lower your monthly disability cover premiums will be.
If you’re self-employed you’re not entitled to any form of sick pay or employee benefits so your deferment period should be shorter so you can start claiming your disability insurance payouts as soon as possible.
To stake a claim for a payout, you may need a medical examination or other such evidence that you’re disabled before your insurer will trigger regular payments.
Setting up emergency funds for the deferment period
Although it’s common for the disability insurance waiting period to be from 3 to 6 months, it could be just one month or last for as long as two years. Choose a waiting period that works best for your situation and then ensure you have enough emergency funds to see you through. As an alternative, you can purchase short-term disability insurance to cover the period until your long-term insurance payments are triggered.
Speak to an expert disability insurance advisor
Getting long-term disability protection is a great way to safeguard your financial future.
Many people become physically challenged at some stage before leaving retirement; according to the Council for Disability Awareness, about one in four 20-somethings are at high risk of becoming disabled at some point before retirement. The average period taken off work due to a disability is about three years.
While most people recover from the disability and return to work, some have to take up a part-time job, or are left permanently unable to work. With this in mind, ensuring that you can support your family if you suffer from an illness or accident that leaves you physically challenged for an extended period is a vital part of your financial safety net.
The insurance advisors we work with can search the market to find you a competitive quote, which is often significantly cheaper than you’d be able to find if you went direct.
Get in touch on 0808 189 0463 or make an enquiry for a free, no obligation chat with one of the expert insurance advisors we work with.
FAQs
The elimination period for long-term disability insurance is a different way of referring to the deferment period. It is sometimes also referred to as a ‘waiting’ or ‘qualifying’ period.
The elimination period you set on your application may influence the cost of your premiums. If you are employed and your long term disability insurance is designed to fill the hole your employment package doesn’t cover, it’s a good idea to set your elimination period to start paying you benefits as your employment package comes to an end.
Elimination periods can be anything from 30 days to 365 days, depending on the policy you have. One of the advisors we work with will be able to help you decide the timeframe which might best suit you and read the small print to ensure you’re getting the cover you need. Make an enquiry for a free, no obligation chat.
The answer is yes! Insurers can’t discriminate against you because of a disability, however, they generally won’t cover you for pre-existing medical conditions. Instead, they’ll take your disability into account and decide what to insure you for.
You’ll need to declare your disability as a pre-existing medical condition when applying for a new insurance policy. You’ll also need to keep your insurer informed of any change in your circumstances so they can keep their records up to date. If you don’t declare any pre-existing disabilities when you make your claim, your claim may be rejected.
As an employer, one of the most important benefits you can provide for your employees is short and long-term disability insurance.
This will ensure employees are well looked after with wage loss replacement in case of serious illness or injury. It gives them peace of mind and provides them with continued income should they be rendered off work for an extended period.
Choosing the right formula for group disability insurance is key to getting adequate cover for your employees as well as maximising your financial investment – disability benefits can be non-taxable or, in some instances, may be subject to tax.
There are many factors to consider when selecting the right cover for your employees; so it’s best to speak to an expert insurance advisor who can guide you on which provider and policy to choose.
Benefits from your long-term disability insurance would usually be taxable as annual payments. However, there are also some provisions that may be made to make your policy exempt from tax in some circumstances.
For more information on whether you could avoid tax on benefits paid from your long-term disability insurance, speak to one of the expert insurance advisors we work with.
Without the security of employment benefits, even a short term disability that leaves a freelancer unable to work could result in financial destitution.
The good news is that there a plenty of options for freelancers to protect their cash flow with disability insurance. Although an online search will bring up a few of the offers on the market, the best way to find the right long term disability insurance is to speak to an expert.
An insurance advisor can help save money and do the hard work of matching you to your best suited disability policy.
Long term disability insurance is especially important for nurses who work long hours in a physically demanding job. Although nurses will often entitled to a form of sick pay as part of their employment package, it may not be enough to see you comfortably through a period of long term disability. That’s why many financial experts recommend nurses top up their financial security and benefits by getting long term disability insurance.
There are plenty of disability insurance offers on the market, but to make sure you make the most of your funds invested, contact us to be put through to an expert advisor.
Disability insurance is available for stay at home mums. If a busy parent is taken out of action by a disability, the knock-on effect on the family can be just as devastating as losing the main breadwinner.
That’s why providers offer long term disability insurance for Mums – get in touch to be put through to an advisor who can take you directly to the provider that best matches your needs.
It can be especially important for pilots to have income protection if anything were to render them off duty for a prolonged period – pilots need to be in great physical and mental shape to carry out taxing flight duties.
Pilot disability insurance is available to all kinds of pilots and offers income protection in case a pilot is temporarily or permanently unable to work due to a disability.
The cost of pilot disability insurance varies from one provider to the next, so it’s best to speak to an insurance expert to find the policy and price that’s right for you.
If long term disability insurance isn’t provided by your employer, you’ll need to search the market and shop around to compare insurers’ offers.
You can ask insurance providers for quotes for long term disability insurance and compare premium rates. The work is in understanding all the fine print and trying to deduce which policy offers you the right cover for the most competitive price.
An insurance advisor with expert knowledge of the market and the fine lines in policy terms and conditions can save you a whole heap of time, hassle and money.
Make an enquiry for a free, no obligation chat with one of the independent advisors we work with.
Disability insurance is designed to payout a portion of your lost income. It ensures you have a solid stream of income to see you and your family through any period where you can’t work due to a disability. However, it doesn’t include cover for long term care or the medical costs of your disability.
There are alternative insurance offers on the market which specifically cover long term care costs. If you’d like more information about getting cover for medical care, contact us and we’ll put you through to a specialist advisor.
The major difference between these insurance policies is the way the benefit is paid out. Critical illness cover pays you a tax-free lump sum, whereas long-term disability insurance is designed to pay you a monthly benefit in lieu of your salary for as long as you are unable to work, until your reach age 65 or until the policy expires.
If you want to protect your income, disability insurance can be a good option. If you want to protect a mortgage, debts and pay for private medical care in the event of critical health, then critical illness cover might be a more viable option.
Talk to an expert insurance broker if you’d like to discuss the pros and cons, or find out what insurance might cost you. The experts we work with can save you time, hassle and money by making sure you get the right policy at the best possible price.
There’s no one size fits all answer to the question of which insurance policy would be right for you. While accident insurance is designed to help you cover the medical costs of an injury, short-term disability insurance will replace a portion of your income if you’re too ill to work. It may be beneficial to take out both personal accident and short-term disability insurance, but what’s right for you will depend on factors such as your overall financial situation and profession.
We work with professional insurance advisors who can help you answer these questions and more. Get in touch if you’d like further advice and counsel.
Buying long term disability insurance is an important step to take, but it can seem daunting to have to do a lot of research and understand how it all fits in with any other benefits you’re entitled to. And then you have to figure out what you truly need when you compare it to your financial situation.
Make an enquiry and we’ll connect you to an insurance expert who understands the UK disability insurance market and can take you straight to your most competitive quote. The insurance advisors we work with will compare leading UK disability insurance providers to help you find an offer that suits your budget and financial goals.
Ask a quick question
We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in long-term disability insurance. Ask us a question and we'll get the best expert to help.
Richard Angliss
Finance Expert
About the author
Richard Angliss has made a career in financial services which stretches over 40 years.
His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.
For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.
At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.
With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them. Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.
He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.
