SAQ - Should Ask Questions

You read the most Frequently Asked Questions about ERISA Long Term Disability (LTD) Claims already. Now the following is a list of SAQ's - Should Ask Questions

What is my long term disability insurance policy's definition of disability?

Your LTD's policy's definition of "disability" makes a huge difference in your case. Some policies will define disability very narrowly, others will define them more broadly, and yet others will combine the two.

1. Any Occupation. This is the narrowest definition of disability. If your LTD insurance policy uses the term "Any Occupation" then you will only be found disabled when you cannot perform the duties of any occupation, not just the one you were in. There are usually limits to this, for example, if you were an engineer earning $200,000 a year and can no longer perform those duties, but can now only perform the duties of a receptionist, you may still be considered disabled.
2. Own Occupation. If your policy defines disability as "Own Occupation" then it is using an easier to satisfy definition of disability. You will be found disabled if you cannot substantially perform the duties of your own occupation. If your occupation was physically demanding, and you are no longer able to fulfill those duties but can handle any desk job, you will be found disabled under your policy.
3. Hybrid. Some policies will combine these two definitions. For example, your policy will initially pay you benefits if you can't perform the duties of your "own occupation." But after 24 months they will switch it the stricter standard where you will have to prove you cannot perform the duties of "any occupation" to continue benefits.

What is the waiting period to receive LTD benefits after I'm disabled?

There is almost always a waiting period between the time you are disabled and you're eligible to receive LTD benefits. This is called an "elimination period" and usually lasts 90-180 days. During this time, you are not eligible for benefits even if you are disabled.

This time period is usually (but not always) covered by a short term disability policy which doesn't have such a lengthy elimination period. You may have to use up all of your sick time, and short term disability benefits while waiting for your elimination period to end.

Are my LTD benefits taxable?

It depends on who is paying for the policy, and what money is used. If it is an individual policy you purchase (not ERISA) and paid for with after-tax dollars, benefits are usually not taxable. If it is a group policy provided by an employer, and the employer paid for part or all of it, and you pay for part or all of it with pre-tax dollars, then the benefits will be taxable.

However, if you paid for your employer provided plan with after-tax dollars, a pro-rata percentage of benefits will not be taxable.

Will my LTD insurance company conduct surveillance or spy on me?

It is very possible your insurance companies will hire investigators to spy on you. This is especially true if there is a red flag in your file, or if your claim is a particularly large one. Red flags include conditions which aren't easily proven with objective medical evidence such as fibroymyalgia.

Investigators will stalk your house, follow you around town, film you outside of your home. They are looking for evidence to deny your claim. So keep this in mind anytime you leave your home. If your doctor tells you not to do anything to exacerbate your back injury, don't go play 18 holes of golf.

Even something simple as carrying groceries or lawn care products from Home Depot can hurt you, and your case.

Who decides whether my application for LTD benefits is approved or denied?

Your LTD insurance company or plan administrator does. Not surprisingly, the entity that has to pay you benefits for years into the future, is usually a little reluctant to do so.

This frequently results in denial of benefits you deserve. But if your claim is denied, you must appeal it directly with the insurance company, which again, not surprisingly tends to deny your appeal.

Only when your claim is denied, and the subsequent appeal is denied, can you take your case to the court to have a judge review your case. But you can't introduce any new evidence.

This entire process is strictly prescribed and if you don't introduce the right evidence at the right time, you will doom your case.

If I am approved for LTD benefits, do I get 100% of my former salary? And for how many years?

Generally, no. You need to read your plan documents, but in most cases it will be a percentage of your former salary. Even then, it may be capped at a maximum amount.

Also check the documents to see how long you will be paid. Some pay until retirement, some cap it off at a fixed number of years.

ERISA Long Term Disability claims are difficult to navigate without an experienced attorney. A single mistake such as missing a deadline, or forgetting to include a key piece of medical evidence, can doom your case. Contact us immediately for a no obligation, free consultation. There is no risk.