As we get caught up in our busy work lives, most of us don’t stop to think about what would happen if we had an accident or our health significantly declined. The reality is that 25- 30% of American workers will face a health crisis during their lifetimes, causing at least a temporary inability to stay at their job. Arthritis, heart disease, brain injuries and other common causes of disability can lead to a sometimes abrupt end to work. Is your income protected by insurance if a disabling event happens to you? It might be, if you have a short term or a long term disability insurance policy.
According to the Council for Disability Awareness, the average length of time for a worker to collect long term disability is three years. Keep in mind that employer sponsored policies will generally only cover 60% of a person’s income. Even then, the plans have an elimination period. This is the time period between someone becoming unable to work and being able to collect their disability benefits.
Why Should I have a Short or Long Term Disability Policy?
Short and Long Term Disability Insurance is meant to protect a portion of your income if you cannot work anymore. Don’t think that social security disability income will be enough (it’s not). Unless you are financially secure to the point of being able to cover your expenses without help for an extended period of time, disability insurance is an inexpensive way to protect your earnings. The plans are usually cheap and employers pay for at least a portion of the premiums. They are offered by well known companies such as The Hartford, Lincoln Financial, Prudential and Mutual of Omaha, to name but a few.
While it is strongly recommended to take advantage of disability policies when they are offered at work, actually being paid benefits under these policies are tricky. As with health insurance, since most people have group disability policies through their employers, they have no input as to what coverage is available. As we all know, insurance companies are profit driven and won’t pay up if they don’t have to. They are also driven by the terms of the policy, which is a legally binding contract. You should ask for a copy of the policy from human resources, so that you have the documentation ready if you ever need it. The policies define what the insurance company has to cover and also what you have to do in order to be paid your benefits. Nothing is automatic, even if your doctor writes a note taking you off of work. While strong medical support is absolutely critical to your claim, it is only one piece of what has be provided.
What Should I do If I need to use my Disability Policy?
If you cannot work anymore because of a health condition, including an accident, your body might force you to stop working. If this happens, be sure to discuss the requirements of your job with your doctor. It is important that your physician has a solid understanding of what your work entails so that everything can be well documented in your medical records. Your application for disability benefits will include a physician’s statement. The insurance company will also review all of your medical records and will often have everything reviewed by their own medical professionals before approving your benefits.
Under most long term disability policies, you must prove that you cannot work in your own occupation for the first two years. After that, it becomes harder to stay ‘on plan’ because you have to prove that you cannot work in any occupation. The ‘any occupation’ requirement means that if there is work out there which you are capable of doing, you have to take the job in order for benefits to continue, even if you are working in a different occupation. Hiring vocational experts is sometimes needed if you were denied. Your ERISA disability attorney can help you understand what support might be needed at this point.
Hopefully you will never have any need to call upon your disability policy. If you do though, I am here to help. I help people with the appeals process once they have been denied coverage after applying for short or long term disability. If you or a co-worker or friend are interested in learning more about how disability insurance denials need to be handled, be sure to claim your copy of my free book ‘Finding the Devil’.