Long Term Disability Myth #1: The Government has you Covered

There is no better time than now to debunk the most commonly held Long Term Disability (LTD) Insurance myth amongst employees of federal government agencies – “the government has me covered”. 

If you are relying fully on the government for Long Term Disability Insurance coverage, consider the following:

1. You are not covered for LTD Insurance in the first 18 months of employment.
2. There is an eligibility requirement. Your disabling illness or injury must be expected to last at least a year. So if you suffer from an accident or illness with a recovery period of less than a year, you will not qualify for the federal disability benefit.
3. You are still required to file for your disability benefit from Social Security – and your coverage is then reduced by any social security benefit you receive.
4. FERS employees: you will receive 60% of your salary for the first year of work (which is taxable), and 40% of your salary (which is taxable) – until you are eligible for normal retirement.
5. CSRS employees: you will receive 40% of your salary (which is taxable) – until you are eligible for normal retirement. 

FACT: Provided you have been employed for more than 18 months AND your disability is expected to last for at least a year AND you only require 40% of your income (reduced further for taxes), the government has you covered – but for most employees, additional LTD insurance protection is necessary to cover their everyday expenses.