Disability Insurance Policy Facts
Short- and long-term insurance policies are meant to protect 40 – 70% of your income if an illness or injury interrupts your ability to continue to work. Unlike auto or medical insurance, disability policies do not have deductibles to meet or spending thresholds to get pay outs, typically referred to as benefits. The only requirement is proving you are disabled according to how the carrier of your disability insurance plan defines it.
Insurance companies like Cigna, Liberty, Standard and Unum to name a handful, offer short- and long-term disability plans for monthly fees they call premiums. While every policy is unique, how premiums are paid makes a big difference in how it pays out as well as what law governs it.
Individual versus Group Plans
If you buy a private policy where premiums are paid with after tax money (meaning wages you did not exempt from taxes through your employer’s payroll), then pay outs are tax-free. So, depending on the percentage of income your individual plan covers, your disability benefits could be comparable to what your take home pay was when you were working. When disability insurance is purchased through an employer on a group plan, and premiums are paid with your pre-tax earnings or as part of a package your employer pays, disability benefits may be subject to income tax. So, coverage would not go as far in this case. Unfortunately, not everyone can afford to buy an individual policy or has access to a private policy through a fraternal organization. Not every employer offers a group policy either. If you do have short- and long-term disability insurance, it is important to understand the specifics of your plan and what law governs it.
Policies Governed by ERISA Law
Most long-term disability policies are governed by a complex federal law called ERISA, which stands for the Employee Retirement Income Security Act of 1974. If your LTD policy is through your employer, most likely ERISA will apply to your LTD claim. ERISA was enacted to help protect employee benefits, but over the last few decades with more and more employers buying insurance policies to cover benefits, ERISA now shields employers and insurance carriers from liability more than it provides protections for the disabled person.
ERISA rules are quite different from the court rules that apply to other types of insurance contract disputes. In ERISA cases, the claimant must submit all the information to support their disability case when applying for benefits for the policy carrier to decide on granting them. If benefits are approved, it is not uncommon LTD insurance companies will terminate benefits at 18 – 24 months and begin using a variety of frustrating and even unethical tactics to try to disprove your inability to work.
If your condition keeps you from being able to work and you need to appeal a disability benefits denial, ERISA rules make it difficult for additional information to be considered later. ERISA rules also give the insurance carriers the benefit of the doubt in court. If you get to the point where you need to litigate your long-term disability claim, the judge will not necessarily be deciding whether you are disabled, the judge will be deciding if the decision made by your LTD insurance company is “reasonable.” Therefore, it is imperative to know what information to submit, when and how to do it correctly to obtain and maintain benefits from LTD plans governed by ERISA.
Given the complexities of ERISA rules and rights, talking with an attorney who focuses specifically on this area of law early on is key. Whether you are considering applying for LTD benefits, have applied or been denied, call for a free consultation or policy review with our Arizona ERISA attorneys.
Insurance companies and employers know ERISA rules and have teams of attorneys on their side. When it comes to ERISA, do not give up or go it alone like they expect you to, get Schiffman Law on your side. We regularly go up against major insurance companies and know what it takes to get and maintain benefits you deserve.
When Your Insurance Company Works Against You, Get Schiffman Law On Your Side.
You are one person.
Insurance companies have entire departments.
Insurance companies have entire legal departments dedicated to disability claim denials. To an insurance company, disability denials are just business decisions made with the sole goal of saving money and increasing profit.
When you hire Schiffman Law, you level the playing field with a winning team of experts on your side.
Policies Governed by Bad Faith Law
Private long-term disability policies also known as Individual Disability Insurance (IDI) plans are often governed by Bad Faith, a state law. Unlike ERISA, breach of contract and insurance bad faith claims get a jury to determine benefits and other compensation. Fully understanding the definition of disability in your LTD plan is paramount. Often policies define disability in two ways:
- Inability to perform your Own Occupation
- Inability to perform Any Occupation
Depending on your individual policy, it may be possible to receive benefits through retirement age or for the rest of your life if you can establish your condition meets the definition of disability through medical and vocational evidence. On top of a breach in contract claim for denying rightfully owed LTD benefits, state law allows claims for additional damages with insurance bad faith.
When you are insured by a LTD policy governed by state law, the insurance company cannot unreasonably withhold your benefits. Examples of insurance bad faith include:
- Insurer alters or twists the language in your denial letter from the language in your policy
- Insurer fails to investigate your claim or unreasonably delays or denies your claim
- It is not uncommon some insurers of policies governed by state law will lead you to believe it is governed by ERISA as a stalling and confusion tactic
When an insurer is proven to be deceptive or fraudulent, a judgement can be made for punitive damages. In this case, the jury can award amounts exceeding the compensation benefits per the plan as punishment for bad faith and to hinder future acts of bad faith from the insurer.
We Know How To Fight Big Insurance Companies for Benefits You Rightfully Deserve
Here are just some of the Long-Term Disability insurance companies we go up against every day:
Why Hire Us for Your Long Term Disability Claim?
Disability & Injury Law is all we do.
Our firm has been devoted to representing individuals in disability and injury law since 1975. You need an attorney who understands your disabling condition, how your insurance carrier operates and the specifics of your occupation like we do.
You get more than just one disability lawyer.
With Schiffman Law, you get a team of experts who work on LTD cases against big insurance companies every day. Insurance companies have teams of attorneys working against you as it is their best interest to deny claims. As big businesses, their priority is profit and pleasing shareholders. Level the playing field by having our LTD attorneys and legal team fighting for you.
You are not a lawyer, let alone one highly experienced in complex ERISA & Insurance Bad Faith Laws.
Insurance companies hope you will handle everything yourself and use their paperwork alone to file your claim and appeal denials. This is not the time to Do-It-Yourself. Why? Because evidence submitted at appeal is the only documentation that will be considered by them and the Court. This is a very complex area of law even for attorneys who are not devoted to ERISA and bad faith insurance cases.
We fight for you and handle everything with your insurance company so you can focus on your health.
We have prevailed on thousands of LTD appeals and lawsuits. When you work with us you no longer need to worry about missing a deadline, knowing what to do with paperwork or requests from your insurance company. We fight for your rights and handle the details for you.
You have nothing to risk and more to gain.
We mentioned what’s at risk because you are not an attorney. Your odds of overturning a disability denial without an attorney are slim to none. If we take you as a client, we work hard for you on a contingency basis. So we do not get paid unless we win or settle your LTD claim.
Convenience and safety.
We can effectively handle your LTD claim without you ever having to come to us. If you prefer to meet in person, we are happy to accommodate. But if getting around is difficult for you, and considering COVID concerns, we can handle everything 100% remotely.