Download your new client questionnaire - click here
Information you must know about your private disability insurance claim - either “short term disability (STD)” or “long term disability (LTD)”
You are missing work because of a chronic illness, a disease or injury. You remember that you have been paying money each month for a disability insurance policy, but you have more questions than answers. How do you apply? What do you have to prove to receive benefits? How long do you have to be out of work? What happens if you can return part time? Do you have to apply for Social Security disability? And the biggest question - what problems can you expect from the disability insurance company?
The world of private disability insurance benefits is confusing and difficult to handle. In this web site, my goal is to give you both a “big picture” overview along with some specific
directions regarding how you may want to proceed.
Here’s the Big Picture
The world of private disability insurance claims is divided into two different types. Type One is the world of employer provided disability policies, and Type Two is the world of individual disability
How Do I Know if my Policy is a Group Policy or an Individual Policy?
The easy way to tell is to determine whether the policy is part of a group benefit plan provided by an employer to employees. If you work at a company, and your pay stub shows a deduction for disability insurance, you have a group policy.
By contrast, if your purchase of disability insurance had nothing to do with your employer, you most likely have an individual policy.
If You are Not Sure, Ask a Lawyer
If you are just not sure, a lawyer experienced in the area of private disability claims can help you. I frequently have new clients bring me stacks of insurance related documents - because I know what I am
looking for, it is usually fairly easy to identify the nature of the policy.
What is the Big Difference Between Group Plans and Individual Policies?
The big difference has to do with a federal law called the Employee Retirement Income Security Act of 1974 - or ERISA for short. Although ERISA was not designed to control disability insurance plans, the
federal courts have interpreted the law to apply ERISA rules to employer sponsored disability plans. Thus, if you have an employer provided disability plan, your claim will be governed by ERISA only - State law does not
apply. If you have a private, individual disability policy, ERISA is not involved and State law probably will govern your claim.
Which is Better - ERISA or State Law?
Both have advantages and disadvantages. The biggest complaint against ERISA is that you cannot recover punitive damages or bad faith damages if the insurance company acts in an outrageous manner. On the other hand, it is often not cost effective for a group insurance company to litigate ERISA claims, and claims adjustors will frequently back down if you produce the proper documentation. Another point to make is that employee claimants often try to pursue claims on their own without the help of a lawyer and they do not know how to document their claim or develop a claims record. It has been our experience that with proper documentation, ERISA group benefit claims will be paid.
Individual disaibility policies have the advantage of permitting you to ask for State law punitive damages for bad faith acts of the insurance company. Since most individual policies are sold to high earners and provide large monthly benefits to successful claimants, bad faith damage awards can cost the insurance company a lot of money. On the other hand, because a lot of money may be at stake, insurance companies carefully investigate individual disability policy claims - this may include surveillance by a private investigator and the use of “independent” medical examinations to contest your claim.
The bottom line is that if you are in the position of pursuing a private disability claim, you have to live with whatever type of policy applies. As a disability lawyer, my goal is to give you advice that
will help you maximize your benefits regardless of whether your claim is an ERISA group policy, or if it is a non-ERISA individual policy. As your lawyer, I need to know whether your claim is ERISA based or not, so I can
make sure to ask for everything to which you may be entitled.
I Paid My Premiums - Why Do They Refuse to Pay?
The simple answer: money. Insurance companies are in the business of predicting the future. They have to predict how many people within a given group will file claims at various times in the future. Insurance companies invest the money they collect from you in things like real estate and the stock market. If their “payout risk” predictions are accurate and if their investments are good, there is sufficient money to pay out claims.
In recent years, insurance companies have faced a number of unexpected problems. First, they found that it is very hard to predict risk accurately. New diseases such as HIV/AIDS, chronic pain conditions such as fibromyalgia and Epstein-Barr virus were unexpected. Secondly, there has been a large increase in mental health problems in this country - due to the stress of our fast paced lives and due to new federal laws that give special rights to persons with mental health problems. Stress related claims have become especially prevalent among high earners with expensive individual policies.
Second, profit margins have been squeezed by competition. The Internet, for example, makes it easy to shop for and compare insurance products.
Finally, investments have been volatile. The stock market, for example, lost several billion dollars over the past few years when the “dot com” bubble burst. Many insurance companies saw their investments decrease dramatically.
When disability insurance companies see their cash reserves go down, they react by holding on to their money by refusing to pay claims. Sometimes, these refusals to pay are not based on your particular claim - instead, claims adjustors are told to deny claims, to demand extra documentation, to require independent medical exams, etc. My goal as your private disability claim lawyer is to protect you from these abusive tactics.
Download your LTD intake questionnaire - click here
All text and images contained herein are owned by and are copyright © 1998-2012 Ginsberg Law Offices, P.C. and Jonathan Ginsberg None of the contents of this site may be reproduced or republished without the express written permission of the copyright owner. Website design and optimization by Rent My Brain, Inc.