The impact of a serious injury or illness can reach far beyond its physical toll. How will you pay your bills and support your family if you are disabled for a long period of time?
There are different types of assistance you can explore:
· Social security disability insurance is a federally mandated program, but it usually does not provide sufficient assistance and can be hard to qualify for.
· Worker’s compensation provides more benefits, but disability must be due to a work-related injury.
· Long-term disability insurance can replace about 50-80% of your income and disabilities can arise from a non-work related injury, illness, or other medical condition.
You can apply for more than one type of assistance at a time.
Different types of long-term disability coverage
Long-term disability coverage is often provided as part of your employee benefits package. If you’re self-employed, individual long-term disability plans can be purchased through private insurance companies. However, even if you have long-term disability insurance through your employer, you may want to supplement your plan with an individual long-term disability policy.
Long-term disability policies: the fine print varies
Long-term disability policies vary widely in the amount of benefits provided, how disability is defined, and in the length of coverage. An insurance agent or financial adviser can help you determine which policy is right for you. Look for someone who has obtained a Disability Income Associate designation.
Disability is in the eye of your insurance company
How an insurance policy defines “disability” can have a big impact on your ability to obtain benefits.
Some important terms to look for in your policy:
· Own occupation: Your policy covers you when you’re unable toperform the material and substantial duties of your current job.
· Any occupation: Your policy covers you only if you are unable to perform, with reasonable continuity, the material duties ofanyjob
If you have certain types of medical conditions, it may be harder to prove disability. Such conditions include:
· Mental illness
· Back injuries
· Fibromyalgia
· Chronic fatigue
You may need the assistance of an experienced long-term disability attorney to prove that you are unable to perform the material duties of a job with these conditions.
Amount of long-term disability coverage
The pay out from long-term disability insurance is also very policy-dependent, ranging from 50-80% of pre-disability income. Some policies put a cap on monthly pay outs.
Many policies also will allow you to add a cost-of-living adjustment (COLA) to your coverage for additional fees.
Length of long-term disability coverage
Benefits can be available for a period of years that you choose (e.g., anywhere from 1 to 10 years or until you reach age 65). Longer time periods can mean more expensive premiums.
Although you may be saving on monthly insurance premiums by choosing a shorter time period, it may not be worth the long-term costs if your disability removes you from the work force.
Speaking of costs of long-term disability
Some important language in your policy:
· “Guaranteed renewable” means that an insurance provider can’t drop your coverage based on your individual circumstances unless you skip payments.
· “Non-cancelable” means that an insurance provider cannot raise the premiums.
Fighting long-term disability benefits denial
Many valid long-term disability claims are denied. Insurance companies are in the business to protect their bottom line and not your best interests. However, you do have rights.
Under the Employee Retirement Income Security Act (ERISA) , a denial letter from an insurance company should outline:
· Policy-based reasons for denial
· Criteria or guidelines used to deny your claim
· Any information you can provide to address an insurance company’s concerns
· Appeal procedures and deadlines
If your case is governed by ERISA (and most group insurance policies are), you mayhaveto appeal in order to preserve your rights in a court case. It’s important to put all the facts supporting your case on the record during an appeal procedure since you won’t be able to introduce new arguments in a subsequent lawsuit.
The appeal stage can be critical to success in fighting a long-term disability denial. You should seek the assistance of a long-term disability attorney as soon as possible after receiving a denial letter.
