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How are my LTD Benefits Calculated?

Long-term disability (“LTD”) coverage is intended to replace one’s wages/salary should one be unable to work due to a disability. Even though it is a wage replacement, it is important to know that LTD benefits never pay 100% of your salary.

The LTD Benefit

In order to know how much your LTD benefit would be, the best place to start is your LTD policy. Generally speaking, most policies will provide for LTD benefits that are 60% of your monthly income prior to your disability. Many times, the prior monthly income is determined to be 1/12th of your gross earnings the calendar year before your disability.

However, it is important to keep in mind that every policy is a little different. Some policies provide for a monthly benefit of 50%. Others will provide for both 50% or 60% but whether your benefit will be 50% or 60% will depend on what coverage you chose with your employer. Similarly, how your monthly income prior to disability is determined can, and will, vary depending on the policy.

Deductible Sources of Income

Once the monthly benefit amount is figured out, then any deductible sources of income will be subtracted from the monthly benefit amount, if applicable. Deductible sources of income is income the insurance company is allowed to subtract from the monthly benefit. It is important to look at the policy to see what income the insurance company is allowed to deduct from the monthly benefit and what income it is not allowed to deduct.

The most common deductible source of income is Social Security Disability Insurance. Another common deductible source of income is the Workers’ Compensation payments you receive if the disability is due to an injury you sustained at work.

The Monthly LTD Benefit Payment

The monthly LTD benefit payment is the amount the insurance company will pay you while you remain disabled. This is calculated as follows:

LTD benefit - deductible sources of income = monthly LTD benefit amount

Help from a Lawyer with Expertise in Disability Insurance

Disability insurance law is complex. Hiring an experienced disability attorney is important. Because all disability lawyers at this law firm focus on disability insurance claims, we have expertise in disability insurance law.

That means:


The firm can help at any stage of your disability insurance claim, including:

Because federal law applies to most disability insurance claims, our lawyers are able to represent clients across the country.

Call to speak with an experienced disability attorney. Consultations are free.