Long-Term Disability Insurance vs. Workers’ Compensation: What’s the Difference?

Many times, we often think of disabilities being either genetic or caused by a freak accident. Unfortunately, disabilities are far more common than you think. The average person has about a 5% chance of suffering from a workplace disability.

If you’re like most people who go to work every day until retirement, it’s important to learn about long-term disability insurance. After all, you could one day suffer a life-changing injury and need disability insurance.

There are two common types of disability insurance. These are long-term disability insurance and workers’ compensation.

In this article, we’ll explain how each is different. Whether you’re simply interested in the topic or currently injured, you’ll find what you’re looking for below.

What Is Long-Term Disability Insurance?

Long-term disability insurance is a policy that will provide you with income if you’re unable to work due to a disabling injury or illness.

Employers offer long-term disability policies as part of an employee benefits package. You can also purchase your own policy after reviewing some long term disability insurance quotes.

What Is Workers’ Compensation?

Workers’ compensation is a state-mandated program that provides benefits to employees who get injured or ill as a result of their job. Workers’ compensation pays for medical expenses and, in some cases, income replacement.

It’s important to note that workers’ compensation only covers work-related injuries and illnesses. If you’re injured outside of work, you would not be eligible for workers’ compensation benefits.

How Are Long-Term Disability Insurance and Workers’ Compensation Different?

There are a few key ways in which long-term disability insurance and workers’ compensation differ:

• Long-term disability insurance is optional for employers, whereas workers’ compensation is mandatory
• Long-term disability insurance covers injuries that are not work-related
• Long-term disability insurance typically has a waiting period before benefits begin, whereas workers’ compensation typically does not have a waiting period

Now that the basic information is out of the way, let’s discuss how each form of disability insurance works.

What Are the Steps for Filing a Long-Term Disability Insurance Claim?

If you have long-term disability insurance and suffer an injury or illness that prevents you from working, you will need to file a claim with your insurance company.

Your long-term disability insurer will ask you to provide proof of your disabling condition. This can include things like medical records, test results, and statements from your treating physician.

Once your long-term disability claim is approved, you will begin receiving monthly benefits. These benefits will replace a portion of your income.

It’s important to note that long-term disability insurance claims can take several months to be approved. This is why it’s important to have an emergency fund in place in the event that you’re unable to work for an extended period.

What Are the Steps for Filing a Workers’ Compensation Claim?

If you’re injured or become ill as a result of your job, you will need to notify your employer right away. Your employer will then file a claim with their workers’ compensation insurance company.

You will be asked to provide information about your injury or illness, as well as any medical treatment you’ve received.

Once your claim is approved, you will begin receiving benefits. These benefits can cover things like medical expenses and income replacement.

It’s important to note that workers’ compensation claims can be complex and time-consuming. This is why it’s important to have an experienced attorney on your side who can help you navigate the process and get the maximum amount of benefits you deserve.

What Happens If Your Claim Is Denied?

If your long-term disability insurance claim is denied, you have the right to appeal the decision.

If your workers’ compensation claim is denied, you also have the right to appeal. However, appeals for workers’ compensation claims are handled a bit differently than long-term disability appeals.

Workers’ compensation appeals are heard by a panel of judges known as the Workers’ Compensation Appeals Board.

When dealing with an appeal, you should always hire an attorney to represent you. Your opponent will be your employer’s insurance company, and they’ll come prepared to defeat your appeal by any means necessary.

What Kinds of Things Does Long-Term Disability Cover?

Long-term disability insurance can cover a wide range of injuries and illnesses. Some common examples include:

• Cancer
• Heart disease
• Stroke
• Multiple sclerosis
• Alzheimer’s disease
• Parkinson’s disease

In order to qualify for long-term disability benefits, you must be unable to work for an extended period of time. The definition of “unable to work” will vary from policy to policy.

Some policies require that you be completely unable to work in order to receive benefits. Others only require that you be unable to perform the duties of your own occupation.

Still, these policies will provide benefits if you’re able to work but are earning less than you did prior to your injury or illness.

What Kinds of Things Does Workers’ Compensation Cover?

Workers’ compensation is a bit different than long-term disability insurance. Some common examples of injuries and illnesses covered by workers’ compensation include:

• Injuries sustained in a workplace accident
• Repetitive stress injuries
• Illnesses caused by exposure to hazardous materials

As with long-term disability, the amount of benefits you’re entitled to will depend on the severity of your injury or illness.

If you’re completely unable to work, you may be eligible for total disability benefits. These benefits can replace a portion of your lost income. If you’re able to return to work but are earning less than you did prior to your injury or illness, you may be eligible for partial disability benefits.

Which Is the Better Option?

When it comes to long-term disability insurance and workers’ compensation, there is no clear winner. Both have their pros and cons, and it’s your employer that decides which one is best for you.

The good news is that each disability insurance policy will help you in a time of need. If your claim is denied, you can fight for the rights you’re entitled to. Are you interested in reading more health-related articles? If so, check out our blog for the best health content.