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Long Term Disability, often called LTD, is a form of insurance that covers the beneficiary's in the event of a prolonged or life long disability. About 28% of employees are covered by Group Long Term Disability insurance though their employment. Most of these LTD policies are issued by major insurance companies such as UNUM Provident, the Hartford, Metlife and CIGNA. LTD benefits can provide a disabled person with additional monthly income above Social Security Disability (SSD) benefits, as well as bridge the gap between the onset of disability and when the person’s SSD claim is approved.

Types of disability insurance
The two main types of disability insurance are Individual Disability and Group Disability. Individual Disability Insurance policies are much more expensive than the Group LTD policies that employers provide for employees. Whereas most Group LTD policies are governed by ERISA, an Individual Disability Insurance policy is governed by state contract law, meaning that the claimant has a right to have a jury decide whether he or she is disabled.

Most Individual Disability Insurance, or IDI, policies were issued years ago, often from companies like Paul Revere, MassMutual or MetLife. These are policies that usually do not have offsets for other income (such as Social Security Disability) and are “own occupation” policies throughout the entire benefit period. Most IDI policies do not distinguish between physical disabilities and mental disabilities, and have far fewer limitations on benefits than Group LTD policies. Also insurance companies handling IDI claims are subject to state law.

Long Term Disability Insurance and ERISA
The majority of Group Long Term Disability claims are governed by federal law called ERISA, which stands for the Employment Retirement Income Security Act of 1974. ERISA was passed to protect worker’s pensions. ERISA’s scope includes “health and welfare benefits”, which includes Long Term Disability insurance claims. ERISA is federal law and pre-empts state law.

2012 Report of Long Term Disability (LTD) Claims
The Council for Disability Awareness issued its 2012 report which summarizes Long Term Disability (“LTD”) claim data and identifies continuing and emerging trends. Seventeen CDA member insurance companies, representing over 75% of the disability insurance market, contributed disability claim data for this report.

Key Findings:
 * $9.3 Billion in Long Term Disability insurance claim payments were made in 2011 by CDA members
 * 662,000 disabled persons received LTD benefits from CDA members in 2011
 * 155,000 new disabled persons were approved for LTD benefits
 * 1 in 4 of today’s 20 year olds will become disabled prior to retirement age
 * Average LTD claim duration is 31.2 months

Leading Causes of Long Term Disability Claims:
 * Neck, Back and Joint Disorders (30.5%), including Arthritis, Herniated Disc, Bulging Disc, Osteoporosis, Rheumatism, Scoliosis, Back Pain and Sciatica
 * Spine and Nervous System Disorders (13.9%), including Multiple Sclerosis; Epilepsy, ALS, Paralysis, Bell’s Palsy, Macular Degeneration and Meniere’s Disease
 * Cardiovascular and Circulatory Diseases (12.3%), including Heart Disease, Heart Attack, Stroke, Aneurysm, Coronary Artery Disease (CAD) and Angina
 * Cancer (8.9% including Breast Cancer, Prostate Cancer, Lymphoma, Leukemia, Hodgkin’s Disease and Tumors

The 2012 survey participants included, among other insurers, Aetna, AIG, Ameritas, Assurant, Guardian, The Hartford, Lincoln Financial Group, MassMutual, MetLife, Prudential, Sun Life and Unum.