Why Long Term Disability Benefits are Cut-off/Terminated After They Approved
You are disabled, can no longer work but you applied for long term disability benefits and were approved. You breathe a sigh of relief and believe you will be okay moving forward.
Then you get a letter from your LTD insurance carrier telling you your benefits have been terminated.
How can this be? Your health has not changed, your just as disabled now as you were when your benefits were approved. So why are they now cutting off your benefits?
Reasons why LTD Insurance Companies Terminate Your Benefits
Even if your disability benefits are approved initially, your insurance company can terminate the benefits for a variety of reasons. Although there are a lot of similarities between the different insurance companies, each policy is different, and your disabling medical conditions are unique to you. So the list below should not be taken as legal advice and you need to consult with an attorney to discuss your case.
Change in the definition of disability after 24 months: “Own Occupation” to “Any Occupation”
Most group long term disability policies contain a section that changes the definition of the term “disability.” This change usually happens at 24 months.
In order to qualify for LTD benefits, in the beginning you usually must satisfy the “Own Occupation” standard. Meaning, i it must be determined you are unable to perform your regular duties of your occupation due to physical or psychological impairments.
After 24 months, some policies change the standard to “Any Occupation.” Meaning, it must be determined you are unable to perform your regular duties of any occupation due to physical or psychological impairments. “Any Occupation” is usually defined as “any occupation that the claimant is or becomes reasonably fitted by training, education, experience, age, physical and mental capacity” to perform. Courts have sometimes interpreted such language to mean if you are capable of performing virtually any job that exists, your benefits can be terminated.
A lot of recipients of long term disability benefits lose their benefits at 24 months because of this.
Time limitation on mental/nervous conditions
This is also usually implemented at 24 months. Many group policies will limit claims involving disabilities arising from mental, nervous, and psychological impairments. They’ll cut these off at 24 months.
So many people suffering from anxiety, PTSD, OCD, depression, or similar impairments, may lose their benefits after 24 months.
Why do they limit these claims? Because from their point of view, these impairments are easily faked or exaggerated.
Disabilities diagnosed by subjective complaints
Some policies limit benefits for chronic pain conditions such as arthritis and chronic back pain, and for many other conditions primarily diagnose with subjective complaints. This includes chronic pain syndrome, soft-tissue injuries, fibromyalgia.
Oftentimes you will need objective evidence of these conditions to continue receiving benefits. Here is an excerpt from a Metlife policy:
Neuromusculoskeletal and soft tissue disorder including, but not limited to, any disease or disorder to the spine or extremities and their surrounding soft tissue; including sprains and strains of joints and adjacent muscles, unless the Disability has objective evidence of
Spinal tumors, malignancy, or vascular malformations;
traumatic spinal cord necrosis; or
Sometimes the insurance company will determine you experienced medical improvement and you are no longer disabled. In order to do so, there must be substantial medical evidence of actual medical improvement where you can now return to work.
Termination due to failure to apply for Social Security Disability Benefits
Almost all policies require you apply for SSDI benefits. That’s because they get an offset for any SSDI benefits you receive. Because this saves them money, they force you to apply for it. If you don’t, they will cut your benefits off.
Failing to provide updated proof of your disability
You are usually required to continuously update the status of your disability. You can do this by:
- Continuing treatment and providing the LTD insurance company with these records
- Annual or semi-annual re-certification from your doctor
- Independent Medical Exam
So it is important to find out what your policy requires of you, and to provide the information they require.
You reach the maximum age of benefits
Pretty simple. Most policies will pay you benefits until a certain age (usually in your mid-sixties). When you reach that age, the benefits stop.
You go back to work
Well, if you go back, they’ll cut your benefits off. There are exceptions to this. If you go back to work but at a job earning substantially less than what you earned before, you may be able to keep all or part of your benefits.