Definition: Defining the Meaning of Disability Insurance
Often called DI or disability income insurance, or income protection, is a form of insurance that insures the beneficiary's earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. For example, the worker may suffer from an inability to maintain composure in the case of psychological disorders or an injury, illness or condition that causes physical impairment or incapacity to work. It encompasses paid sick leave, short-term disability benefits (STD), and long-term disability benefits (LTD).
Helpful information you should know regarding short-term and long-term disability insurance claims.
As a result of a sickness or injury, there are thousands of people every year that file claims with their disability insurance company. Disability insurance policies are long documents which can contain complex language. There are rules and regulations that both the insured and the insurance company must follow during the processing of a disability insurance claim. An insured's failure to comply or satisfy the terms of a policy could result in a claim denial or delay. We have asked Gregory Dell, a nationwide disability insurance attorney, to provide some frequently asked questions and answers regarding short term and long term disability insurance claims.
Questions and Answers from Disability Lawyers Regarding Disability Insurance Claims:
Do I have to file an appeal before I can file a lawsuit
If your policy is a private policy or one that you purchased on your own, you do not have to file an appeal before bringing lawsuit. However, if your policy is governed by ERISA, you do have to exhaust administrative remedies before filing the lawsuit, so you do have to file your appeal. Just as a word of caution, there have been cases and instances where people thought it would be pointless to file their appeal, so they just brought lawsuit immediately and their cases were thrown out of court because they didn't exhaust that administrative appeal.
What should you do when the disability insurance company does not respond to your ERISA appeal
If you don't have a decision back on your appeal within the 45 days, there's a golden opportunity on day 46 to file a lawsuit. In doing so, you put your claim in a light most favorable for you; it gives a standard review to the judge where the judge is going to determine in his opinion whether or not he thinks you're disabled, rather than giving discretion to the insurance company to see if they acted reasonably in denying your claim. If you don't already have an attorney who has filed your appeal for you, it's in your best interest to get an attorney to be prepared to file a lawsuit on your behalf on day 46.
Can I earn money while I collect long term disability benefits
Disability claimants often ask me if they can earn money through some other method besides just collecting their long-term disability benefits. The answer to this question really depends on the language in your policy. If you have an own occupation definition of disability, then the likelihood is that you could work in some type of different occupation and earn money. However, if you don't have an own occupation definition of disability, the probability is that if you earned any kind of money in some other profession, any money you earn would be offset from your disability benefit payment.
So if you were earning $3,000 a month in a long-term disability benefit payment and you had some other occupation that paid you $1,500 a month, for example, the likelihood is that the disability carrier may claim an offset of $1,500, which would leave you with $1,500 left of your monthly benefit. If you have specific questions about your policy and whether you can work and continue to collect your disability benefits, go ahead and give us a call and we'll be happy to answer your questions.
Can my disability claim be denied if my doctor has not released me to return to work
We get a lot of calls from people who say their claims have been denied even though their doctors haven't told them they can go back to work; they haven't been "released for work." However, the insurance company, upon receipt of the claim, is going to start doing their own medical investigation. They're going to send it to their doctors for review; they may send it out to an independent doctor to do a peer review. If one of those doctors come back and say, "Well, I don't find any restrictions or limitations or medical reasons as to why this person shouldn't be working," the insurance company can rely upon those doctors to deny your claim, regardless of what your actual treating physicians are stating.
Can I receive disability benefits while my appeal or lawsuit is pending
Once a long-term disability carrier has made a decision to deny your claim for benefits, they will not pay you any benefits until such time that you prevail on either an appeal or following a lawsuit.
Am I required to have surgery in order to collect long term disability benefits
The disability carrier cannot require you to undergo surgery. There is always the exception of some disability carriers that might cite some random case where a particular claimant didn't undergo some kind of procedure and the disability carrier is trying to make it as if that was a surgery. For example, you have a back problem and a neurosurgeon or an orthopedic surgeon has recommended you for back surgery, and you don't want to take the risk to go for surgery, that's perfectly understandable and reasonable, and there's no way that the disability carrier can deny your benefits for not undergoing a surgery.
What does it mean when a disability insurance company pays disability benefits under a "reservation of rights"
Payment under "reservation of rights" can continue from up to three months to six months, even up to a year depending on how long the insurance company has taken to evaluate your claim. After reservation of rights have been paid, they can either terminate your benefits or they can lift reservation of rights being paid normally under your disability policy.
Can a disability insurance carrier claim an over-payment if a claimant receives worker compensation benefits
If you are receiving workers' compensation benefits, the likelihood is that your disability carrier is going to claim an offset or an over-payment for any disability benefits that you've received. This would be the case if you had a long-term disability policy that's governed by ERISA or is a group benefit policy. However, if you have an individual disability income policy and you're collecting workers' compensation benefits, the likelihood is that your benefit will not be offset and you would be able to receive the workers' compensation benefits as well as the long-term disability insurance benefits. There's no set law as to whether or not you can receive workers' compensation benefits and long-term disability benefits; the law is governed by the language in your policy.
If I am physician claiming long term disability, can I treat myself
The answer to this question is that even if you are a physician and you may know every single thing about your medical condition, you absolutely cannot treat yourself in order to qualify for long-term disability benefits. We have represented numerous physicians and we often get asked the question, "Why do I have to go to the doctor every three, or four months, or six months, or once a year if I know there's nothing else a doctor can do for me and I know exactly what's wrong with me" The answer is that you probably can treat yourself without any problems whatsoever, but your disability policy requires you to be under the continued care of a physician. If you have any specific questions about your medical treatment or things that you could do in order to improve your claim for long-term disability or continue your claim for long-term disability, feel free to contact us at the link below.
What can I do if the disability insurance company is delaying disability payments
If a disability company has been dragging their feet, it's been more than 90 days that they haven't paid disability benefits, they continued to tell you that they are evaluating your claim, it's advisable at this point that you should contact a disability lawyer to begin representing you against them. The reality is that once you have a lawyer involved who's familiar with these tactics, who's familiar with these insurance companies, and need to hold their feet to the fire, the insurance company may act at that point. Usually individual claimants don't have that type of fire-power or don't have that type of knowledge and experience to deal with these insurance companies. So if you have a particular issue with one of these companies where they've been dragging their feet, they haven't paid your disability benefits, please contact us.
Information supplied courtesy of the experts at www.diattorney.com who specialize in disability insurance claims.
Quick Facts: Disability Insurance
Short term and long term disability insurance can protect your financial wellbeing by replacing lost wages if an illness or injury prevents you from working. Some employers offer disability insurance plans. If your employer does not offer this coverage, or if you are self-employed, you can buy personal disability insurance.
- Short term disability insurance - Provides coverage for a limited amount of time. You receive benefits after a short waiting period of up to 14 days. You are then covered for the length of time specified in your policy, which can be from several months up to one year.
- Long term disability insurance - Covers injuries and illnesses that prevent you from working. It does not cover child birth. It provides coverage over a longer time period than short term disability coverage.
Statistics: Disability Insurance
If you work for a living, your lifestyle depends on your ability to earn an income. Which means your standard of living could be seriously threatened if you couldn't work. Will Social Security and other government benefits protect your financial well-being? Don't count on it.
- 2 out of 3 American families live paycheck to paycheck; 70% of families can only afford to be without a paycheck for 1 month or less.
- Disability is the leading cause of personal bankruptcies and causes nearly 50% of all mortgage foreclosures, compared to 2% by death.
- 48 percent of VA Mortgage Foreclosures are attributed to disability.
- 17 percent of American families (1 in 6) have at least 1 adult who is disabled from employment.
- 82 percent of American workers have inadequate or no disability protection.
- Only 17 percent of small businesses offer disability insurance coverage.
- Social Security Disability Insurance (SSDI) is available if you have worked 10 years before becoming disabled; after 5 months of disability; if the expected duration of disability is more than 1 year. It pays an average of $894.10 per month.
- The average monthly Social Security Disability Income (SSDI) payment is $938, replacing on average, about 33% of current income.
- A typical male, age 35, 5'10", 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks: A 21% chance of becoming disabled for 3 months or longer during his working career; with a 38% chance that the disability would last 5 years or longer, and with the average disability for someone like him lasting 82 months. If this same person used tobacco and weighed 210 pounds, the risk would increase to a 45% chance of becoming disabled for 3 months or longer.
- A typical female, age 35, 5'4", 125 pounds, non-smoker, who works mostly an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks: A 24% chance of becoming disabled for 3 months or longer during her working career; with a 38% chance that the disability would last 5 years or longer, and with the average disability for someone like her lasting 82 months. If this same person used tobacco and weighed 160 pounds, the risk would increase to a 41% chance of becoming disabled for 3 months or longer.