Guide To Understanding Your Long-Term Disability Insurance Policy

Disability insurance has long been an employment perk offered by Maryland companies, and data from the US Bureau of Labor Statistics (BLS) reveals that 35 percent of civilian workers have access to long-term disability insurance. If you are a policyholder, you probably understand the basics: You pay premiums to the insurer, typically on a monthly basis from your earnings. In exchange, the insurance company pays benefits if you sustain a medical condition that renders you unable to work for an extended period of time.

By reviewing your coverage terms, you know basics like the premium and benefit amounts. However, there are many other provisions that can be confusing or misleading if you do not have a background in law. A Maryland long-term disability lawyer can explain the details and assist with filing a claim, but this guide to understanding your policy may also be helpful. 

What Constitutes Disability 

The concept might seem obvious, but the definition of disability is an important LTD insurance provision that is often overlooked. Your policy documentation will include specifics about what illnesses and injuries are covered, and these conditions typically align with those contained in the Social Security Administration (SSA) “Blue Book” – i.e., the Listing of Impairments SSA uses to assess disability.

Plus, you should note whether the definition applies to disability for purposes of your OWN occupation or ANY occupation. You might not be eligible for benefits depending on whether you could work in another field. 

Exclusions and Limitations 

The insurer will always look out for its own interests by spelling out restrictions on your benefits, so make sure you understand:

• The elimination period, which is essentially a waiting period between the time you became disabled and when you will start to receive payments;
• The benefit period and how long your payments will last;
• Coverage for mental and pre-existing conditions; and
• Tax considerations, since your payments will be taxed based upon whether you paid premiums from before- or after-tax dollars. 

SSDI Requirements 

Many people with long-term disability insurance will also qualify for Social Security Disability Insurance (SSDI), a government program that pays benefits based upon your work history. While employed, you paid premiums into the system through mandatory deductions from your paycheck. Your LTD insurer will likely require you to apply for SSDI when filing a claim for coverage under your private policy. Then, the insurance company will apply an offset for the amount you receive from SSA. Ultimately, you will receive less from your LTD insurance, though the total monthly payment amount will not change. 

Learn More from Our Maryland Long-Term Disability Attorneys 

While this guide to long-term disability insurance may be useful, a general understanding may not be enough to ensure you get the benefits you deserve promptly. Dealing with an insurer can be challenging, so trust our team at the Law Offices of Steinhardt, Siskind and Lieberman, LLC to advocate on your behalf. Please contact our offices in Glen Burnie, Owings Mills, Ellicott City, or Annapolis, MD to set up a free consultation today.

Resource:

bls.gov/opub/ted/2020/short-term-and-long-term-disability-insurance-for-civilian-workers-in-2020.htm