What is Long Term Disability insurance and how does it work?
Your alarm clock goes off at 6am. You roll out of bed, hop in the shower and prepare to start another workday. After your eight hours on the clock, you jump back in your car and head home, ready to do it all again the next day.
It’s the kind of steady, clockwork-like routine that many of us take for granted.
But what would happen if you suddenly couldn’t get out of bed, and the burden of an unexpected health crisis leaves you unable to even show up for work for months at a time?
Unfortunately, for many it’s not just a hypothetical question. The reality is that each year millions of Americans find themselves facing unexpected illness or injury that leaves them unable to work — and struggling to feed themselves and keep a roof over their head.
That is where Long Term Disability Insurance comes into play. Understanding how this vital financial safety works can help you make informed decisions, and prepare to meet an unexpected disability head on.
In this comprehensive guide, Fields Law will discuss what Long Term Disability is, how Long Term Disability works, what Long Term Disability covers, and how this financial safety can help you prepare for the unexpected.
What is Long Term Disability Insurance?
Long Term Disability insurance is a form of insurance designed to provide a financial benefit that replaces a portion of your income if you experience unexpected injury or illness and are unable to work for an extended period.
Most policies can replace anywhere from 50-80% of your monthly salary, but the exact amount will depend on the specific policy you hold.
Long Term Disability benefits typically take effect after Short-Term Disability insurance expires, as Short-Term Disability benefits may only be received for a few weeks or months.
A Long Term Disability policy is capable of providing financial support for years, even up until retirement in some cases. Long Term Disability benefits act as a buffer, allowing you to focus on your recovery without the added stress of struggling to pay your bills.
Long Term Disability insurance policies differ from other similar forms of disability, like Workers’ Compensation, in that their benefits are not exclusively tied to illness or injury related to on-the-job incidents. Most policies cover non work-related injuries and illnesses, making them a versatile way to recover lost wages.
How Does Long Term Disability Work?
Like any other form of insurance, you must enroll in a policy and pay a premium to keep it active.
Some employers may offer their employees optional Long Term Disability policies, which may provide a baseline level of coverage. Individuals may also purchase their own private Long Term Disability policies that can cover a greater portion of income than a standard employer-provided policy.
When you purchase your coverage, you’ll be required to define several vital policy terms:
- Elimination Period: A waiting period before your Long Term Disability benefits take effect. This usually coincides with the coverage offered by Short Term Disability, and can be anywhere from 90 days to a year.
- Benefit Period: The duration of how long your benefits will be paid. Benefit periods can range in length from as little as five years, or up to your retirement age.
- Benefit Amount: The percentage of your pre-disability income that will be paid as a benefit, between 50-80%. This is intended to provide substantial relief without incentivizing you to remain out of work if you are otherwise capable of returning.
Understanding these terms is essential to making an informed choice on your coverage.
What Does Long Term Disability Cover?
Another vital concept to understand with Long Term Disability insurance is the “definition of disability”. This clause dictates under which circumstances you will qualify for benefits.
There are two primary definitions:
- Own Occupation Disability: This type of Long Term Disability insurance considers you disabled if you are no longer able to perform the duties of your specific occupation. This is generally more favorable to the policyholder (and thus, often requires a larger premium).
- Any Occupation Disability: A more strict definition of disability, meaning that you cannot perform the duties of any occupation for which you are otherwise reasonably qualified.
Within these two definitions of occupational disability, the actual nature of what Long Term Disability does cover can vary between providers. However, some common conditions are likely to qualify under most policies, such as:
- Chronic Illnesses: Severely debilitating issues like Multiple Sclerosis, lupus, fibromyalgia, chronic fatigue syndrome, Crohn’s disease.
- Mental Health Conditions: Severe depression, anxiety disorders, bipolar disorder, Post Traumatic Stress Disorder (PTSD).
- Accident-Related Injuries: Catastrophic injuries such as back or spinal cord damage, traumatic brain injuries, severe burns, or loss of limbs.
- Cancers: Various forms of cancer and their requirement for extensive treatment.
- Heart Conditions: Heart disease, congestive heart failure, post-stroke complications.
These severe disabilities, injuries, and illnesses are likely to be covered if they significantly impact your ability to work for the long term.
However, it is important to mention that most insurance policies have exclusions. Most notable are pre-existing conditions and self-inflicted injuries. We highly recommend that you review a policy’s specific exclusions before enrollment.
How to File a Long Term Disability Insurance Claim
When you’ve experienced a qualifying disability that will keep you out of work long term, you’ll need to submit a claim to your Long Term Disability insurance provider before any benefits can be administered.
While the process may seem daunting, we’ll help walk you through the typical process so you have a good idea of what to expect:
-
Understand Your Policy’s Definition of Disability and Elimination Period
Before you start the claim process, take a moment to review your policy for its definition of disability. Whether it’s “own occupation” or “any occupation” will help you understand if you meet the criteria for eligibility. It’s also worth reviewing your elimination period, to get an idea of how long you will need to wait before your benefits can begin.
-
Submit a Claim to Your Insurance Provider
If your Long Term Disability plan is privately held, you’ll need to notify your insurance provider directly. If you have an employer-sponsored plan, you can contact your HR department and they can help you file your claim. You should aim to submit your claim as early as possible once your doctor has confirmed your inability to work.
-
Complete Claimant Forms Accurately
You’ll likely be required to complete a number of forms, including a “Claimant’s Statement” that describes your disability, job duties, and how your condition prevents you from working. It’s vital that you are both thorough and honest here. Inconsistent statements or missing information can delay or even prevent your claim from being approved.
-
Gather Supporting Documents and Obtain a Physician’s Statement
Your doctor will be required to complete forms regarding your diagnosis, prognosis, treatment plan, and your functional limitations and restrictions that make you unable to work. You’ll also need to gather appropriate documentation such as hospital records, test results, clinical notes, therapy notes, and medication lists. The more comprehensive this information, the stronger your claim will be.
-
Submit All Documentation by the Deadline
Once you have gathered all the necessary documentation regarding your disability, be sure to submit it to your insurance provider in advance of any deadlines given. Be prepared for the insurance company to request additional documentation, such as a functional capacity evaluation (FCE). We also strongly advise that you keep copies of everything you submit for your records.
Once you’ve submitted a claim, your Long Term Disability insurance provider may take several months to review your documentation. If important information or records are missing or incomplete, you may experience delays that could extend the waiting period by several weeks to months.
That is why it’s imperative that you make sure your documentation is well-prepared before submitting your claim.
What to Do If Your Long Term Disability Insurance Claim is Denied?
Insurance companies are businesses first and foremost, and they are motivated to protect their bottom line — and that means approving as few claims as possible.
Some of the most common reasons given for an insurer to deny a Long Term Disability claim include:
- Insufficient Medical Evidence
- Failure to Meet the Policy’s Definition of Disability
- Exclusion Due to Pre-existing Conditions
- Inconsistent or Inaccurate Information
- Missed Deadlines
- Disagreement Between an Independent Medical Exam and Your Physician’s Opinion
Being denied benefits that you have paid for and urgently need can feel like a devastating blow, but with legal guidance from experienced Long Term Disability lawyers like those at Fields Law, you may be able to achieve a successful appeal.
Fields Law can help you navigate the complex appeals process by:
- Reviewing the Denial Letter: The denial letter must specify why your claim was denied. Understanding why you were denied is the first step to a successful appeal.
- Gathering Additional Evidence: We can help you gather additional evidence to strengthen your claim, such as more detailed medical records, statements from co-workers, vocational assessments, diagnostic test results — and even a detailed personal log of how your disability affects your daily activities and routine.
- Drafting a Strong Appeal Letter: Your appeal letter should specifically address each reason for denial, and refute the insurance provider’s claims with new and existing evidence.
- Submitting Your Appeal Before the Deadline: Most insurances have a deadline for you to submit an appeal, typically around 180 days from the date you were issued a denial. Getting your appeal in well before this deadline is essential.
Most insurers will review your appeal within 45 days and issue a revised decision regarding your Long Term Disability benefits.
Need Help Gaining Long Term Disability Benefits? Fields Law Is In Your Corner
Long Term Disability benefits are a vital safety net for millions of Americans who have suffered a debilitating injury or illness, but getting the benefits you deserve isn’t always a guarantee.
Understanding how Long Term Disability works and what Long Term Disability covers is essential to submitting a successful claim and securing your financial well-being at an extremely difficult time.
If you need help submitting a strong claim to your insurance provider, or appealing a denial, Fields Law can help.
We are a nation-wide disability law firm with experience gaining disability benefits for clients across all 50 states. Each year we file and win more Long Term Disability cases than any other law firm in the United States, successfully helping thousands like yourself get the benefits they deserve.
Don’t wait another moment to get professional legal assistance with your claim. , and let our experience substantially improve the odds of winning a successful claim.
It costs nothing to get your questions answered today. Our representation is always backed by our Win-Win Guarantee® – we only get paid if you get paid.
*DISCLAIMER*
This blog post provides general information regarding disability and divorce. Individual cases will vary significantly. For personalized guidance on your specific situation, it is essential to consult with a legal expert licensed in your state.
