Our video explains that in long term disability insurance claims, there is no single, comprehensive legal definition of disability. Each insurance company writes its own definitions. As a claimant, you will receive disability benefits only if you satisfy the precise description of disability as stated in your policy.
Why is it then that so many insureds are awarded short term disability (STD) benefits, only to have the benefits cut off, or denied for long term disability (LTD) benefits – under the same policy?
This is because most group disability policies have two definitions of disability: one for short term, and one for long term.
Definitions of Disability – Short Term vs. Long Term
First let’s examine how short term disability benefits work
In almost all group disability plans and some individual disability plans, STD benefits are integrated with the insurance carrier’s LTD benefit plan. If you become disabled, and the claims administrator finds that you qualify for benefits, you start out under the STD plan. This generally covers you for a period of 3–6 months up to two years.
Once you reach your maximum short term disability benefit period, and you are still unable to work, you may be entitled to benefits under the company’s long-term disability Plan.
The company will assess whether you qualify for LTD benefits. And here is where the definition of disability changes: with most group disability plans, the term “disability” has two definitions.
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Definition of Long Term Disability
The following definition shows how Short Term Disability coverage integrates into Long Term Disability coverage, and the shift in the definition of “disability” occurs:
- You are not able, solely because of injury or disease, to perform the material duties of your own occupation.
- Thereafter you are not able, solely because of injury or disease, to work at ANY occupation for which you are qualified or could become reasonably qualified based on your education, training and experience.
In a nutshell:
In the first 24 months of Plan payments, “disability” means you cannot do the material and substantial duties of your regular job / own occupation because of sickness or accidental injury.
If you continue to be disabled and need long term disability benefits under the Plan, “disability” now means you can no longer perform ANY job for which you are reasonably qualified – a scenario that is much harder to support and prove.
Example: If you are a high performance sales professional who is now bound to a wheelchair. You meet the definition of disability for short term disability, because you could not perform the networking and extensive travel involved with your sales profession – your own occupation or regular job.
However, under the definition of disability for long term disability benefits, the insurance company may find that you are able to do administrative work. If you can be gainfully employed working from a desk—you are not disabled and your claim for long term disability benefits is denied.
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Claimants must be aware of these subtle, yet dire changes in definition of disability.
Proving you are disabled for the long term is monumentally more difficult than for the short term. You have many more hurdles to clear, and it is tough to demonstrate disability correctly on your own.
In our fictional case of the sales professional, how would you prove you cannot even do desk work? Most claimants never imagine they would need to do so.
Unfortunately, insurance providers have an arsenal of tactics and maneuvers with which they may deny benefits for legitimate claims. A shifting definition of disability is a signal of how important it is to read your policy, understand its terms and definitions, and realize the best way to prevail is to have a winning strategy of your own.
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Next, see why group policies are more restrictive with the definition of disability, and are written much differently, than are individual disability insurance policies.
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