Insurance Paperwork Under a Magnifying GlassThe point of insurance is peace of mind. You pay your premiums, so you are confident that you are protected. Whether it’s health insurance, automotive collision coverage, or a homeowner’s policy, it’s there as a safety net if something goes wrong. At least you think it’s there. However, every kind of insurance policy has fine print, and if you haven’t read and understood the fine print, you could be in for a shock when you file a claim. This is especially true with long-term disability (LTD) because it is often an employee benefit that people don’t bother to investigate thoroughly. If you rely on an LTD policy to get you through if you cannot work due to disability, you better understand the policy.

What to Look for in Your LTD Policy

If long-term disability insurance is one of your employee benefits, request a copy of the policy and the summary plan description from your employer or human resources department. Before you to where you need to file a claim, understand the policy's terms. Key terms to read and understand include:

Definition of Disability

Your policy will spell out what is considered a disability and, therefore, eligible for compensation. Generally, there are two types of long-term disability policies. With one, you will be disabled if you cannot do the work you do, and with the other, you will be considered disabled only if you cannot do any work. In most policies, these distinctions are broken down as follows:

  • Own occupation. The wording of your policy will indicate that due to illness or injury, you cannot perform the tasks required of your current job. This is the more generous coverage because you can still collect on the policy even if you can work. Sometimes, you can even continue to work while collecting the benefit, as long as you are not working in your original field.
  • Any occupation. This type of coverage is more restrictive. To collect on a policy that requires you to be unable to do any work, you must be totally disabled and incapable of gainful employment. For example, if you can no longer do the strenuous lifting required of your original job, but you can sit at a desk and work on a computer, you will not be eligible for benefits.

It is easy to determine whether you have an ‘own occupation’ or an ‘any occupation’ policy by reading the summary description. Misunderstanding these terms is a common reason for denial.

Exclusions and Limitations

Every policy will have a list of exclusions and limitations, and you must know what they are before filing a claim. For example, many LTD plans do not cover mental illness or pre-existing conditions. There may also be a limit on how long you can collect payments—sometimes it’s until you reach the age of 65, and other times it’s a certain number of years. You will also probably have a period of time—usually three to six months—before your LTD benefits will kick in. This is known as an elimination period. Finally, your policy will likely require you to also apply for Social Security disability. If you are granted benefits, your LTD benefits will be reduced by the amount the SSA awards you.

Disability Determination

Employer-sponsored LTD plans are subject to the Employee Retirement Income Security Act (ERISA), which stipulates that the insurance company providing the policy may determine eligibility for benefits. This means that the people deciding whether you meet the qualification for disability are the people who least want you to qualify. This is why so many legitimate claims are denied, forcing the applicant to file an appeal.

Appealing an LTD Denial With the Help of an ERISA Attorney

If your long-term disability claim was denied, it could be because of something in the fine print of your policy, or it could be for no good reason. To figure this out, you need the help of an attorney experienced in ERISA procedure. Contact my office in Upper Arlington. I'll review your denial letter and help you launch a successful appeal. To learn more about ERISA claims, request a free copy of my book, Don’t Go it Alone: How Insurance Companies Sabotage Disability Claims.


James Monast
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Board-Certified Workers’ Compensation Attorney in Columbus, Ohio