Anyone could face the risk of disability before retiring. In fact, since one in four people currently in their 20’s will become disabled before they retire. Work accidents, car crashes, and chronic health conditions contribute to many new disability cases every year.
Some people recover from their injuries in a few weeks or months and return to work, but those who do not rely on long-term disability benefits to receive income while they manage chronic health conditions or permanent disabilities.
Knowing the basics of long-term disability puts you in the best position to ask the right questions and protect your rights. You can also hire an experienced disability insurance attorney to assist with your claim or file an appeal.
What is Long-Term Disability Insurance and Why is it Important?
Long term disability insurance provides an income to people who cannot work due to severe injuries or other health conditions. You become eligible for this benefit after a waiting period, which can range from 30 days to a year. You may receive short-term disability benefits during this period.
Without long-term benefits, many people would have no financial support after exhausting short-term disability payments run out. They would need to rely on savings or other income. Not everyone has this option or is comfortable with depleting their savings, so long-term disability benefits provide a safety net.
How Does Long-Term Disability Insurance Work?
The application process and benefits received depend on the source of the plan. Employers, private insurers, and the Social Security Administration (SSA) provide long-term disability insurance in different forms:
- Employer disability insurance: ERISA requires employers to provide access to long-term disability insurance coverage. Employers can offer special plans as part of a benefits package or set up voluntary options.
- Private individual insurance: Private insurers provide policies that protect against long-term disability. You can purchase these policies from a qualified agent. Ensure you understand the terms and conditions of the policy.
- Social Security Administration: The SSA provides Social Security Disability Insurance (SSDI) for those who have worked and paid into the system over a certain number of years or Supplemental Security Income (SSI) to those with financial need.
Eligibility and Coverage: Who Qualifies for Long-Term Disability Insurance?
Eligibility varies across providers and depends on the reason for asking. For example, almost anyone can purchase an individual long-term disability plan from a private insurer, but some employers may not allow immediate participation in ERISA plans. Eligibility for claims also depends on the specific policy.
Employer Insurance
Employers often require applicants to prove they cannot perform their current job. They might ask the applicant to attempt a less strenuous position before granting benefits. Employer policies also require claimants to show medical proof of disability and complete all necessary paperwork correctly.
Private Individual Insurance
The eligibility criteria for private insurance coverage varies depending on the policy documents and the insurer’s underwriting guidelines. The policy usually sets parameters for what it considers a qualifying medical condition.
Social Security Administration
The SSA requires applicants to meet stringent standards for disability before granting benefits. You must prove that you cannot perform any type of work due to a severe medical condition with an expected duration of at least one year or more.
Types of Disabilities Covered Under Individual and ERISA Plans
Private insurers and ERISA plans follow similar guidelines for determining whether you qualify for long-term disability. However, you must review the details in your plan to get a final answer.
Here are some types of disabilities that are likely to qualify for long-term disability benefits:
- Mental health disorders such as major depression or schizophrenia
- Conditions that cause chronic pain
- Severe physical injuries due to accidents or illness
- Neurological disorders such as Parkinson’s Disease
- Chronic illnesses, like cancer
- Severe cardiovascular conditions, such as chronic venous insufficiency
- Organ failure, such as kidney disease
- Spinal injuries that lead to limited mobility or paralysis
- Loss of one or more limbs, such as amputation of the legs
Exclusions and Limitations Under Individual and ERISA Plans
While long-term disability insurance provides a crucial lifeline to people who cannot work, not every condition is covered. Exclusions are specific conditions or circumstances under which the insurer is not obligated to pay.
Insurers often do not pay for injuries or disabilities caused by the following:
- Drunk driving
- Criminal activities
- Rebellion or civil disobedience
- Acts of war
- Self-inflicted acts
Limitations are conditions that modify the coverage provided. For example, certain types of disabilities may have limited coverage durations. It’s common for insurance policies to limit benefits for mental health disabilities to 24 months. Similarly, the policy might limit benefits for those living overseas or the benefits for disabilities resulting from specific causes, such as hazardous activities.
Choose Marc Whitehead & Associates to Take Care of Your Claim
We have spent the past three decades helping people like you get the long-term benefits they need. Our team handles individual insurance and ERISA claims all across the country. We also help you build a strong appeal case for denials. Contact our team to learn more or schedule a free consultation.
