Many people have long-term disability policies to protect their income in the event that they become unable to work. In many cases, these LTD insurance policies are part of a person’s benefits through their employer. In some cases, people buy them from the insurer.

An LTD insurance plan can help cover a number of expenses that people can incur when they are disabled.

Why would I need LTD insurance?

Even if you have few apparent health problems now, that can change quickly. In some cases, health problems can surface that can prevent you from working. In other cases, you may suffer an injury that can prevent you from working. While you’re unable to work, you’ll need some kind of income.

The Social Security Administration reports that disability is common, per NerdWallet — more than one in four 20-year-olds will experience a disability that affects them for at least 90 days before they reach the age of 67. Long-term disability insurance can replace a portion of your income in the event you become disabled and unable to work.

What does LTD insurance cover?

When people think of a disability, they may think of a serious injury leading to a permanent condition, such as a car accident that causes someone to become paralyzed. However, disabilities can be a range of conditions that prevent a person from working.

Subsequently, LTD insurance can cover a range of conditions. The can include conditions like heart attacks, cancer, diabetes, back injuries, diabetes, and a range of other illnesses.

Some plans define a disability as a condition that prevents a person from working any job for which they are qualified, according to Policy Genius. Other plans define a disability as a condition that prevents a person from performing their occupation, and will pay out accordingly.

Additionally, some plans will also pay out a partial coverage if a person can work part-time but not full time. In the case of some plans, they only pay out if a person cannot work at all.

What is the difference between long and short term disability insurance?

Many employers offer both long and short term disability insurance. These are the two main types of disability insurance coverage.

Usually, short term disability insurance replaces 60 to 70 percent of a base salary for around a few months to one year. There may be a short waiting period between when you become disabled and when you can collect benefits. This is usually around two weeks.

Long-term disability insurance replaces less of a person’s income — usually between 40 and 60 percent of a person’s salary.

These benefits end either when a person’s disability ends or after a certain number of years, depending on the policy. In some cases, long-term disability coverage ends at retirement age. Usually, there is a waiting period of 90 days between when a person becomes disabled and before their benefits begin.

In some cases, you may qualify for short term disability benefits before your long-term disability benefits kick in.

Does LTD insurance cover things other than income?

Unfortunately, long-term disability insurance can only be used to cover income. Having a disability can be expensive. People may incur medical expenses, like doctor and hospital bills, as well as the cost of medication. These expenses may be covered by health insurance, but they’re not covered by LTD insurance.

What laws protect disability benefits?

Many people get disability benefits through their employers. Happily, a federal law protects people who have disability benefits through their employers. That law is called ERISA, or the Employee Retirement Income Security Act. 

ERISA sets a standard of minimum requirements for both retirement plans and disability insurance plans, with the aim of protecting the people who participate in the plans.

ERISA requires that plan providers inform plan participants of their benefits cover under their disability plan, so they can make the most out of the benefits.

Additionally, ERISA establishes a fiduciary duty for plan administrators, which means that the person or party in charge of administering the plan is required “run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses.”  

This insures that plan participants’ interests are protected, even though an administrator, or the company providing the plan, may have other interests. Insurance companies make money off of plans, so ERISA is an important element in protecting retirement and disability benefits as valuable resources for employees.

In addition to establishing fiduciary duty requirements, ERISA also requires that insurers follow certain procedures when accepting or denying claims for benefits. This is particularly important in the case of disability benefits because many people rely on disability benefits for their income while they are unable to work due to a disability.

ERISA requires that an insurance provider accept or deny a claim within 30 days, and if the claim is denied, the company must give a reason why the plan was denied. Additionally, ERISA then requires insurers to give plan participants a way to appeal their denial to have another chance of receiving benefits.

Do I Need a Disability Insurance Attorney?

If your long-term disability claim has already been denied, an experienced disability insurance attorney can help you go through the complex process of filing an appeal, or even with filing an LTD insurance lawsuit if you have exhausted all administrative appeal options. If you have not yet filed your claim, an attorney can help you with the process from the get-go. Either way, consulting a legal expert can help you maximize your chances of receiving the payments that you are entitled to.

Get Help With Your Long Term Disability Insurance Appeal

If an insurance company denied your long-term disability insurance claim within the past 180 days, a knowledgeable insurance attorney can help you appeal.

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