How Long Does Long Term Disability Take To Process
Are you waiting for your disability insurance carrier to APPROVE your claim? Attorneys Gregory Dell and Stephen Jessup discuss what you can expect while waiting for your disability insurance claim decision. Learn the factors that effect a disability insurance claim decision, what an Elimination Period is, and stalling tactics the carriers take advantage of.
GREG DELL: Hi, Im Greg Dell with attorneys Dell & Schaefer. And todays disability insurance question of the day is, How long does disability insurance claim take to process? And Stephen, thats a very common question that has a lot of variables that go into that, even when I say how long does it take to process is basically how long until my claim is going to be approved? And what are the factors when someone calls you with that question that would answer that question?
Employment Termination And Long
Can I be fired while I am on long-term disability? We get this question all the time.
Unfortunately, the short answer is yes. Generally speaking, employers can fire employees at any time. They cant just fire you because of your disability that would be a human rights violation. Legally, they have to provide termination or severance pay.
So, in some cases you may have a legal claim against your employer. For instance, if you are terminated without severance pay. You would also have a case if you believe it was because of your medical condition or disability. In these cases, you can win compensation in court.
Most employers wont terminate you if youre on long-term disability because they know it looks bad. They want to avoid lawsuits and human rights claims. Therefore, cautious employers will allow you to be on sick leave for up to two years.
But, after two years, your employer may have the option to terminate you for cause. This means they would only have to pay the minimum severance allowed under provincial laws. This type of termination is based on the frustration of employment. This is a complicated area of law. If this is your situation, I urge you to get specific legal advice.
Can The Insurance Company Use My Social Security Disability Denial To Terminate My Long
As mentioned above, the insurance company will often request the documents related to your Social Security Disability claim. Your long-term disability claim could be influenced by the records and decisions in your SSDI file. As a result, your reports to the Social Security Administration should be consistent with your reports to the insurance company.
Social Security Disability and long-term disability typically have different definitions of disability and use different criteria to assess the records on file. As a result, approval for one does not guarantee approval for the other. However, your social security disability claim may bolster your long-term disability claim if you are approved based on the medical conditions that also form the basis of your LTD claim.
Unfortunately, the reverse is also true the insurance company may argue that you are no longer entitled to long-term disability benefits if your Social Security Disability claim is denied because the Social Security Administration determined that your medical conditions are not disabling. You should consider contacting an attorney if your SSDI claim is denied and you are concerned about it negatively impacting your long-term disability claim.
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Factors That Effect A Disability Insurance Claim Decision
STEPHEN JESSUP: Its going to be, in a lot of ways your policy, the language of the policy. Say, youre were able to extended the elimination period if the insurance company has all the information. If theyve requested information from you, and you havent provided it, that cuts into the amount of time that they have under the law, especially under an employer-provided policy to make a decision.
So there is a lot of factors that can really go into it. Everyone thinks the insurance companys dragging their feet, drag their feet. And they do. Theres quite a bit of that. But theres also a responsibility of the insurer to make sure theyre providing all the information needed so the review can be done.
Benefits Of A Longer Elimination Period
A longer elimination period means lower premiums. If you can only afford so much for long-term disability insurance, you may need to pick a longer elimination period.
You should find the right balance of premium payments versus elimination period length that works for you. Most long-term disability insurance policies are the most cost-effective with a 90 day elimination period, so opting for a longer elimination period likely wont be worth it.
Many people are able to get some financial support during the elimination period with a short-term disability policy, which has shorter elimination periods and pays benefits for a much shorter amount of time.
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Long Term Disability Insurance Benefits
Long term disability insurance is a type of insurance that covers a portion of an individuals income if they have become injured or ill. The coverage will not usually supplement someones income 100 percent, instead, long term disability insurance limits provide between 50 and 70 percent of a monthly salary.
The most significant difference between short-term and long-term disability benefits is that long-term benefits are measured in benefit periods of years rather than months. The benefit period usually begins a few months after making the claim. If needed, you can claim long term disability insurance for anywhere from two to ten years, or even until retirement age, based on individual policy terms of your LTD insurance and the type of disability claim you file. Typically, long-term benefits cover up to 60 percent of a persons gross monthly income.
According to U.S. Department of Labor statistics, most long-term plans have a maximum amount payable and the median maximum payout in 2014 was $8,000 per month.
Long Term Disability Plan Details
Salary Replacement: Up to 70%
Maximum Monthly Benefit: Up to $25,000 per month
Benefit Waiting Periods: From zero days to two years
Definitions of Disability: Cover the employee’s own occupation, any occupation and zero-day partial disability
Coverage Options: One, two-, or five-year plan designs, or to age 65 own occupation periods
Physicians, Attorneys and Dentists: Own Specialty definition of disability
Reporting: Administrative claims reports service available
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Long Term Disability Insurance: 2022 Guide
What if a serious injury or illness prevented you from working? Without your primary source of income, could you still pay the bills and take care of your family? What would happen to your hard-earned retirement savings?
While these questions aren’t fun to think about, answering them can help you prepare for the unexpected and improve your long-term financial health. Here lies the value of long term disability insurance.
To learn everything you need to know about this important type of income protection, read our 2022 guide to long term disability coverage below.
What Type Of Disability Insurance Do I Need
Disability insurance is one of the most important parts of financial planning. While you may have enough of an emergency fund to cover a few months of expenses if you were unable to work, most people cannot afford to not work for much longer particularly if you cannot work for years.
If you can afford to purchase both types of disability income insurance, then it often makes sense to purchase both short and long-term disability plans. In this way, you will have insurance coverage for relatively short periods of time when you cannot work and have the peace of mind to know that you will have income replacement if you are unable to work for much longer.
If two disability insurance policies are not in your budget, then your best option is to purchase an individual policy for long-term disability coverage. These types of plans are often more expensive but are a more substantial financial safety net. At the same time, focus on building up your emergency fund so that you can cover your basic expenses if you have a shorter-term illness or injury.
Medical Conditions That May Qualify For Long
Many people think long-term disability insurance is for people who have been physically injured in an accident and are unable to work as a result of their injury. While this may be true, its important to know there are many medical conditions that may also entitle you to receive disability payments.
Some of the medical conditions that may qualify for long-term disability benefits include:
- Bipolar disorder
- Multiple sclerosis
The above list of medical conditions is not exhaustive, and qualifying conditions vary from policy to policy. Before filing a long-term disability claim, its important to understand how your insurance company defines a disability. This information can be found by carefully reading your insurance policy.
What Are The Long Term Disability Requirements
The most important aspect of filing a long-term disability claim is providing evidence to prove that your disability meets the definition of disability laid out in your actual insurance policy.
It is important to understand what conditions may qualify a person to claim long term disability benefits. According to the Council for Disability Awareness, musculoskeletal disorders are the number one cause of disabilities. This group of conditions includes arthritis, back pain, spine disorders, joint disorders, fibromyalgia, and more. The majority of long term disability claims are reportedly caused by illnesses such as cancer, heart attacks, or diabetes. Other significant causes include back pain, injuries, poisoning, and mental disorders.
Cost Of Living Adjustment
If you’ve been approved for benefits, you can expect your benefits to increase 1% to 3% each year if your policy contains a cost-of-living adjustment . The COLA may be part of your basic coverage or offered as an optional rider, and it is usually indexed to a well-known measure of inflation, such as the Consumer Price Index .
I Have To Separate Myself From The Financial Strain Even Though I’m Right In It
Dreier is lucky enough to have some savings, but she’s also the primary breadwinner for her family. Her husband also has a disability that caused him to stop working as an airline pilot more than a decade ago.
To buy her family some time, she ended up liquidating one of her investments so she could pay her mortgage. As of now, she’s spent about $11,000 on various treatments, which has stretched her finances even thinner. Insider verified her medical expenses, which included Hail Mary treatments like red light therapy.
“I have to separate myself from the financial strain even though I’m right in it,” she said.
Dreier’s situation is complicated by the fact that a lot of medical professionals don’t understand long COVID. She said she got unsatisfactory information from her first doctor about why she was sleeping so much and how long it might last.
She’s since been treated for long COVID symptoms by multiple doctors, and is currently getting help from a long COVID clinic, according to medical records viewed by Insider.
But she never took an official test, and she was vaccinated. That’s what hurt her in securing long-term disability, according to the rejection letter from her insurance company.
“It’s just funny to think about now because it feels like there are so many rapid tests, but people don’t even use them because they’re not always reliable,” she said, of the time period when she was sick. Studies show that rapid tests like the ones available at stores can miss cases.
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Whats The Difference Between Long And Short Term Disability
Short term disability is intended to cover you immediately following a serious illness or injury, and long term disability insurance is intended to maintain income replacement if your condition keeps you out of work past the end of your short term disability benefit period, even to retirement, depending on your plan.
More Opportunities For Coverage
You can provide Long Term Disability insurance for your employees. You can also offer them the option to increase their coverage at group rates. Consider adding a Long Term Disability plan for buy-up.
Consider adding Long Term Disability insurance as a Voluntary option. Your employees can choose to buy LTD coverage under the group policy and pay the group rate.
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Disability Insurance Coverage: How Do You Enrol
Applying for insurance coverage is how you enrol in a plan or policy. Without coverage, you cannot file a claim should the need arise. How you apply for coverage will depend on the type of disability policy:
Applying for Group Insurance Coverage
You apply for group insurance coverage through your employer, union or association. You are eligible to enrol because of your status as a full-time employee or member of a union or professional association.
The application involves filling out a form. If the group covered by the insurance is small, you may also have to fill out a medical questionnaire. Or undergo medical tests. With large organizations there are no barriers to enrolment other than your status as being a member of the group. Once enrolled in the plan, you are considered a covered person under the plan. If you later become unable to work, you can file a long-term disability claim under the insurance policy.
Applying for Individual Insurance Coverage
Applying for individual insurance is more complicated than group insurance. You will have to provide detailed information about your medical history and undergo a medical assessment and bloodwork.
The insurance company then reviews your medical information to determine if they will agree to offer you a long-term disability insurance plan.
What Is Disability Insurance
Disability insurance is there to protect you if youâre unable to work because of an accident, injury or illness. If you’re a small business owner, certain policies may also protect your business and reimburse any covered expenses incurred during your disability. This can help you avoid depleting your emergency fund or retirement savings if something happens.
This is where you might have questions. What qualifies as a âdisabilityâ? How much does a plan cost? How much income will it provide in case of injury? The answer is: it depends on the plan.
- As the name suggests, short-term disability insurance covers you in the event of a short-term injury or illness â typically 3 to 6 months. This type of coverage is required by employers in some states.
- Long-term disability policies cover longer terms, such as 2, 5 or 10 years. Many mid- or large-size employers offer long-term disability coverage via a group plan like health insurance, but you can get supplemental coverage through an individual plan.
- The government also offers Social Security Disability Insurance, but only to qualified individuals who meet a strict definition of disability and adhere to stringent requirements.
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Total Disability Vs Partial Disability
Insurance policies have different definitions of disability. The two most common definitions are total disability and partial disability.
Total disability means you cannot perform the essential or regular duties of your occupation or any occupation.
Partial disability means you can still work to some extent. Meaning you are able to do some of the important duties of your occupation , or your income has dropped by more than 20%. Partial disability is usually only available with individual insurance policies. All policies include total disability.
What Qualifies For Long
The qualifications for long-term disability are usually more stringent than those for short-term disability. With short-term disability, benefits can be awarded if the employee is unable to do their job. With long-term disability, benefits will typically only be awarded if the employee is unable to do any job. What constitutes a qualifying event will be specified in the policy, so it is important to understand when benefits may apply before accepting a long-term disability policy.
Qualifying events may include chronic pain, cancer treatments, or debilitating illness or injury lasting more than 26 weeks. If an employee could qualify for another form of income replacement, such as Social Security Disability Insurance, the long-term disability policy will no longer provide benefits.
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Long Term Disability Insurance Takes A Weight Off Your Shoulders
If you experience a covered illness or disability that leaves you unable to work for an extended period of time, Unum Long Term Disability Insurance can pay a monthly benefit of up to 60% of your normal income. You can use this benefit however you need, whether its to pay out-of-pocket treatment costs or to cover personal bills and day-to-day expenses.
Our coverage includes treatment for serious forms of cancer, as well as recovery from severe injuries. The most common reasons our customers use this benefit are1:
- Cardiovascular disorders
- Joint disorders
A disability can drastically impact your financial situation if youre not prepared. If youre the primary income provider in your home, a disability can place a huge stress on your loved ones. Protect what youve worked so hard to build. Talk with your HR representative to see if Long Term Disability Insurance is available through your workplace.
How To Help Determine How Long Long
How long does long-term disability insurance last? Many people find the details of long-term disability insurance a little confusing but the details are pretty simple once you know how long-term disability insurance and short-term disability insurance work together. You also need to know the difference between group disability insurance plans and private long-term disability insurance plans. Once you are familiar with the basic idea of how long-term disability insurance works and how short-term and long-term disability insurance can work together youll see why having this insurance is so important.
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