There are a number of common issues pertaining to long-term disability benefits (LTD) that claimants’ wish they had known to avoid financial hardship. Policyholder experiences, attorney insights, and anecdotes around denied or terminated claims can help avoid common pitfalls.
- Number one, it is important to realize group policies that employers offer under ERISA are more restrictive than many expect. Policies typically pay only 60% of pre-disability income (sometimes less after taxes if the employer paid premiums), and have benefit caps.
- Eligibility for LTD benefits shift after 2 years from “own occupation” (an employee cannot perform their specific job) to “any occupation” (cannot perform any suitable job) raising the bar to continue benefits.
- Offsets are aggressive and reduce LTD benefits. LTD benefits are commonly reduced dollar-for-dollar by social security disability payments (SSDI), workers’ comp, pensions, or other income. This can lead to overpayment demands (lump-sum repayments to the insurer) when SSDI is approved retroactively.
- Many policies limit benefits to 24 months for conditions like depression, anxiety, or even physical issues with mental components (e.g., chronic pain, TBI) leaving policy holders in a bind when benefits run dry.
- Pre-existing condition exclusions and portability issues often catch claimants by surprise. Group policies often aren’t portable when you change jobs, and pre-existing conditions with lookback periods often ranging from 3 months to a year can lead to denials.
- Insurers routinely use video surveillance, social media, and “independent” medical exams (IMEs) to deny or terminate benefits. Many report regretting not being more careful – a single day of exceptional vitality captured on camera or posted on social media can tank benefits.
- Benefits may be taxable, and bonuses/commissions often aren’t fully replaced, leaving claimants with far less than 60% of their pre disability pay.
Issues that Can Result in Denial of LTD Benefits
LTD claims may be denied for lack of “objective proof” linking symptoms to inability to work. Self-reported symptoms, gaps in treatment, or relying only on insurer forms without detailed narratives, doctor statements, and vocational evidence are among the top mistakes leading to denial.
The filing window for LTD benefits is strict. Missing deadlines can lead to denial of disability benefits.
Insurers are incentivized to deny or terminate claims to keep costs down. Many do not realize that the process can be adversarial, that benefits are not guaranteed so it is important to make a strong claim right from the start.
Many regret not securing professional help early in the process to strengthen their claim. DIY claims are more likely to be denied and have lower success on appeals. Specialized ERISA/disability attorneys can strengthen claims significantly and are essential to successfully appeal a denied claim.
Contact an Experienced Long-Term Disability Claim Attorney
Many people assume broader, longer protection under LTD and are surprised when the policy comes up short. It is important to read and understand your insurance policy, reviewing the summary plan description carefully. Consider working with an experienced LTD attorney to avoid common pitfalls when applying or appealing a denied claim. When you have questions regarding your LTD benefits or your claim is denied, contact the Law Offices of Alan C. Olson & Associates for answers at 262-785-9606.
