The company provides protection for Loss of License for half the number of years for which you have service, with a minimum of five years coverage. That's free, negotiated into the contract. After that, LTD kicks in until age 65, but that's an insurance you have to pay for. Both of them however, start at the six month point, so you need to have six months of sick leave to cover you first.
If you don't have six months of sick leave saved up, that's when the pilot-funded program comes into play. It's called Pilot Mutual Aid (PMA), and those with insufficient sick leave can get that, but it only pays $6k per month, tax free until the other programs kick in. You have to participate in the PMA program to partake, and I wanna say that right now, it's about $20 or so per month.
Then at the six month point, LOL/LTD kick in, and that's based strictly on earnings. It's capped at $12.5k per month. Taxable or not for LOL depends on your elections and payment of payroll tax on "imputed" income, and LTD insurance is always non-taxable.
Most guys sign up for both PMA and LTD (LOL is included in the contract). It's relatively cheap insurance to cover you if you can't hold a FAA Class I for some reason. With all the crap that could possibly happen to an airline pilot, it's almost a no-brainer.
Hope this helps.
Bubba
