If you were asked to name your most valuable asset, you might name your house, retirement account, or another tangible thing. But for most people, the most valuable asset that we have isn’t something that we own. It’s our ability to make a living.
We often take this ability for granted, assuming that we will always be able to work and earn the same or an even greater income than we currently do. But there are many things that can impact our ability to work — such as becoming disabled. According to the Social Security Administration (SSA), 26% of 20-year-olds will become disabled before they reach retirement age. A long term disability (LTD) insurance policy offers income protection in the event that you are unable to work due to a disability.
In this way, an LTD policy is a way to ensure financial stability for your future. Unfortunately, insurance companies often seek to deny or minimize LTD claims. In these situations, a skilled disability lawyer can help you get the benefits that you are entitled to under the terms of your policy.
The Basics: What Is LTD Insurance?
There are two primary types of disability insurance: short-term and long-term. Short-term disability insurance is designed to cover your income for a shorter period of time due to a physical or mental health condition, typically for up to 6 months maximum. In contrast, long-term disability insurance may last as long as your disability does, up to retirement age.
While each policy is different, LTD policies typically provide monthly payments of 50 to 60% of your income for covered disabilities. There is a waiting period to apply for LTD benefits, which is usually anywhere from 90 days to 6 months after a disability starts. Depending on the terms of the policy and your specific disability, the benefits may be paid for 24 months, until you can return to work, or up through retirement age.
LTD policies define disability in two different ways. “Any occupation” policies will only pay benefits if you are unable to work in any job for which you are qualified, while “own occupation” policies will pay benefits if you cannot work in your specific job. Some policies may initially provide benefits based on an “own occupation” standard of disability and then shift to “any occupation” after a certain period of time.
There are a number of ways to get LTD insurance. Many employers either provide this coverage for their employees or allow workers to buy it through their group plan. Alternatively, you can buy disability insurance on your own, directly from an insurance company, or through an insurance broker or professional association.
If you have LTD insurance through a group plan, then it will be governed by the Employee Retirement Income Security Act of 1974 (ERISA). This law requires insurance companies to follow certain guidelines, such as providing information to policyholders and setting up an appeals process. If an insurer violates ERISA or otherwise acts in bad faith in handling an LTD claim, you may be able to file a federal lawsuit against the company.
State law governs LTD policies that were purchased individually. If your insurance company acts in bad faith with regards to an LTD policy that you purchased on your own, then you may file a lawsuit against them in state court.
Understanding Your LTD Policy
If you have become disabled and cannot work as a result, you may want to file a claim for LTD benefits. There are several steps in this process, starting with examining and understanding your LTD policy. Doing this can help you put together a stronger application for benefits, and ensure that you don’t miss any important deadlines.
There are several things that you should look for when analyzing your policy. First, look for any time limits for filing an initial claim or any appeals. Missing deadlines is an easy way for the insurance company to deny a claim.
Second, look at the policy’s definition of disability. Do you have an “any occupation” or an “own occupation” policy? This is important in figuring out whether you are eligible for benefits under the terms of your policy.
Third, examine the policy for any exclusions or limitations on coverage. Some LTD policies do not cover disabilities that are caused by pre-existing conditions, while others exclude or limit coverage for some types of disabilities, such as substance abuse, alcoholism, and mental health disorders. With this knowledge, you can figure out the best way to apply for benefits based on your specific situation.
Fourth, check your policy to see if there is an “elimination period.” This elimination or waiting period is usually 3 to 6 months and is the length of time that you must wait after becoming disabled before you file for benefits. If you also have a short-term disability policy, the waiting period usually coincides with the payment period for those benefits so that you don’t have a gap in coverage.
A New Jersey disability benefits lawyer can analyze the terms of your policy and come up with a strategy for when and how to apply for LTD benefits. Your attorney can advocate for you throughout the process, from helping you with the initial application to helping you gather evidence to support your claim to appealing any denial or early termination of benefits. If your insurance company acts in bad faith or violates the law, then your lawyer can also file a federal or state lawsuit on your behalf.
How We Can Help
There are few things that are more difficult than being diagnosed with a physical or mental health condition that affects your ability to do the things that you had always done — like work. If you find yourself unable to work because of a disability, a long-term disability insurance policy may provide benefits that help to ensure your financial stability.
At Bross & Frankel, we are dedicated to helping individuals with disabilities as they seek benefits. We offer free claim reviews, where we will counsel you on your rights and options. To learn more or to schedule a consultation, contact us today at 856-795-8880 or reach out online.