Why Your Benefit Period Matters: Understanding How Long Disability Insurance Lasts

Long-term disability insurance protects your income if an injury or medical condition prevents you from working for an extended period of time. But how much disability insurance pays and for how long depends on your policy and its benefit period.

How do long-term disability benefits work?

Long-term disability insurance is a highly customizable financial product, allowing you to choose a monthly benefit amount, policy structure and disability insurance add-ons that fit your needs. Part of this process includes choosing how long your long-term disability will last.

When buying an individual policy, you’ll select the following:

• Elimination period. This determines the length of time between becoming disabled and being eligible for disability benefits. A 90-day elimination period is standard, but options generally range from 30 days up to one year (or longer).
• Benefit period. This determines how long disability benefits are paid out and can be the difference between receiving disability income for several years versus all the way through retirement age.

Your chosen elimination period and benefit period impact your overall disability insurance costs. The shorter the waiting period and the longer the benefit period, the more you can expect to pay for monthly premiums. But cost shouldn’t be the only determining factor as a delay in benefits or too short of a payout period could cost you in other ways.

How long is most long-term disability?

Disability insurance companies offer a wide range of benefit periods, potentially paying benefits for a couple of years or even decades. The most common benefit period options include:

• 2 years
• 5 years
• 10 years
• To age 65
• To age 67
• To age 70

Some disability insurance carriers offer a one-year benefit period, and some might not offer a 5-year, 10-year or age 70 option. It really varies based on company and policy. However, as you can see below, all of the major disability insurance carriers offer benefit periods that payout through age 65 and age 67.

Disability insurance carrier	Benefit periods	Elimination periods
Guardian	2 years 5 years 10 years To age 65 To age 67 To age 70	30, 60, 90, 180, 360 or 720 days
MassMutual	2 years 5 years 10 years To age 65 To age 67 To age 70	60, 90, 180, 365 or 730 days
Ameritas	1 year 2 years 5 years 10 years To age 65 To age 67	30, 60, 90, 180, 365, 180 or 730 days
The Standard	2 years 5 years 10 years To age 65 To age 67	60, 90, 180 or 365 days
Principal	2 years 5 years To age 65 To age 67 To age 70	60, 90, 180 or 365 days

What’s the most common benefit period for physicians?

The most common benefit period for physicians is age 65. Doctors, dentists and other specialty professions receive extensive training and often go into high six-figure student loan debt to fund their education. It makes sense that most physicians opt for own-occupation disability insurance coverage with a benefit period that extends through retirement age.

But what does that actually look like in terms of how long your long-term disability lasts?

Benefit period comparison: Shorter vs. longer benefit periods

Two-year and five-year benefit periods can provide short-term relief. But your disability might have long-term challenges that prevent you from returning to work within a few short years. In which case, the clock could run out, leaving you with no income for many years to come.

Let’s say you get in a car accident that crushes your hand, severely impacting your ability as a surgeon. You’re only 35 years old with an entire career ahead of you. Your journey until now has led to hundreds of thousands of dollars of student loans, a $1 million physician mortgage and a comfortable lifestyle for your family.

If you have a five-year benefit period, you should have adequate disability income through age 40 based on this example. However, once that five-year period is up, your disability income will stop entirely — leaving you (or your spouse) scrambling to figure out how to keep your family afloat.

But if you went with a benefit period of “to age 65,” then your disability benefits would continue coming in every month until you recover or reach age 65. In this example, that could equate to 30 years' worth of disability benefit payments versus locking yourself into a short benefit period.

What happens if I recover and return to work?

If you recover from your disability before the end of your benefit period, you might be eligible for a new benefit period for future disabilities. For example, if you have a five-year benefit period and recover within two years, a new five-year benefit period would start if you have a new qualifying disability later down the road.

This might be an example of where having a shorter benefit period could work out. But that’s a big gamble considering you have no way of predicting how long you’ll be sidelined from your specialty for a few years or permanently.

Policy exclusions or limitations might impact how long you receive benefits

Although your benefit period will determine how long your long-term disability benefits will last, there are some caveats to know.

1. Your policy might have specific exclusions based on your medical history. For example, if you have a history of back pain, your policy will likely include a spine exclusion. In that case, you won’t receive disability benefits for a claim related to that particular pre-existing condition. The same applies if you have a documented history of mental health disorders (e.g., anxiety or depression medications), typically resulting in a mental exclusion.
2. Your policy might include a limitation of benefits for mental/nervous conditions. It’s common for disability insurance carriers to limit benefits to 24 months for a mental/nervous condition, as well as substance abuse claims. This policy rider varies by insurance carrier, and it may or may not be required based on your specialty. Note you might receive a 10% discount if you accept a mental limitation.

Your benefit period is clearly stated on the policy cover page. But it’s important to review the entire policy to understand if any exclusions or limitations could impact your benefits to avoid any unfortunate surprises.

Find a disability insurance policy that stays with you every step of the way

Long-term disability coverage is complex by nature. Everything from the benefit period to the definition of disability to optional policy riders can significantly change your level of coverage.

As a physician, you can’t risk relying solely on your employer-sponsored group plan or an any-occupation policy that doesn’t account for your specialty income. Let our team at SLP Insurance review your existing policy to determine your realistic needs. We’ll present you with affordable own-occupation coverage options with the best discounts to keep you covered throughout your career.