Supplementing Your Lost Income: How Your Long-Term Disability Insurance Should Bridge the Gap

After a life-changing injury or medical condition leaves you disabled, it can be difficult to know what your future has in store for you. Other than your own recovery, one of your first priorities is to secure your finances. Facing what could amount to years without an income is certainly frightening, but fortunately, long-term disability insurance may be able to help you stay afloat during your absence from the workplace.

Long-term disability insurance can be a wonderful asset, but it can be very tricky for some individuals to obtain. With complicated application and appeal procedures, many people have a challenging time collecting the benefits that they have paid into for much of their tenure with a particular employer.

When these individuals do finally succeed in obtaining long-term disability benefits, many are surprised to learn that it is not an immediate and complete income replacement: it acts primarily as a supplement, and is not available immediately. Here are some important things to know about your long-term disability policy benefits:

  • You will not receive your long-term disability benefits immediately after you apply. There is window in which you will not receive long-term disability benefits, usually of three to six months. This is known as the elimination period. This is when your short-term disability will still be paying out, so you will still have some supplemental income.
  • You may have to apply for Social Security Disability Insurance, as well. Insurance companies are concerned with their bottom line, and if there is another way for you to collect money, they will insist that you do so. If your Social Security Disability Insurance application is successful, the amount you receive monthly will be taken out of your long-term disability benefits, and you will receive the excess.
  • Long-term disability benefits are not meant to replace your income, they are meant to supplement it. This means that you will be receiving a percentage of your income, which will be outlined in your long-term disability insurance policy. Typically, those on long-term disability receive about 60 percent of their former income.
  • Employer-sponsored plans are covered by the Employee Retirement Income Security Act (ERISA), a law drafted to benefit employers, not you. If your claim is denied, you may have to pursue internal appeal rights. If you do not have an attorney assisting you in your internal appeal, the decision may be nearly impossible to get reversed.

While long-term disability benefits do have certain limitations, they are an important financial lifeline for many individuals and families throughout the United States. If you have been injured and are applying for long-term disability benefits, or have already been denied, reach out to the Philadelphia disability attorneys at Fenner & Boles today.

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