What does LTD signify in the context of insurance?

In the context of insurance, LTD stands for Long-term Disability. This type of insurance provides financial support to individuals who are unable to work due to a serious illness or injury that lasts for an extended period, typically longer than three months. Long-term disability insurance is designed to replace a portion of the individual’s income, helping them to manage their living expenses while they are unable to engage in work-related activities.

Long-term disability policies generally include a waiting period before benefits start, and the duration of the benefits can vary based on the policy terms, often extending for several years or until the individual reaches retirement age. This is crucial for individuals who might face significant financial strain due to their inability to earn a living because of a debilitating condition.

Understanding the purpose and coverage of long-term disability insurance is essential for individuals in planning their financial security and ensuring that they have support in case of an extended period of disability.