I still remember the first job I had as an adult where I received long term disability insurance. I was so proud! I thought I had arrived; I was an adultĀ and I had “real benefits.” However, after representing many, many clients who have suffered disabling injuries or medical conditions that prevent them from working, I have come to the conclusion that long term disability insurance can often be a hollow benefit that either doesn’t pay enough or often isn’t granted.
Having been self-employed for much of my career, one of my greatest fears is suffering a disability that prevents me from working. That is why I enjoy representing people who have long term disability insurance claims. I understand your fears, and the stress that losing your income causes, especially when dealing with a serious medical condition. This is why I counsel people to consider purchasing their own, personal, long term disability insurance policies – or to increase the coverage their employer provides.
Here are some things for you to consider:
1) If you have a high income and/or absolutely cannot stand to lose any income, you should purchase an insurance policy from a private insurance agent because:
a) The Federal law known as ERISA will likely not apply. This means that state law will apply. State law provides insurance policyholders many more protections when claiming benefits and imposes stiffer penalties on insurance companies that wrongfully deny claims;
b) You may be able to purchase an insurance policy that grants insurance benefits if you are disabled from “your own occupation” and that doesn’t require that you be disabled “from any occupation,” (this is a much lower standard and is generally easier to prove);
c) You may be able to decrease the cost of your premiums by extending the “Elimination Period” (the delay in time before you are eligible for benefits);
d) There may be tax advantages for this type of policy;
e) You may be able to purchase a policy that awards benefits much closer to your actual income;
f) You may be able to purchase a policy that includes a “Cost of Living” increase.
2) If you get your insurance from your employer and cannot afford to purchase a private policy, consider doing the following:
a) Purchase as much additional coverage as your employer allows;
b) Decrease the Elimination Period so that your benefits will be payable sooner (there will likely be an extra charge for this);
c) Find out if the insurance policy covers overtime (in other words, if a large portion of your income is from overtime, consider buying a private policy if your employer’s policy won’t cover it);
d) Talk to your tax advisor and find out about tax advantages or penalties based on which option you choose.
We all want to be able to live long, productive work lives and be able to support ourselves and our families for as long as we choose. Unfortunately, this is not always in our control. Protect yourself now by learning about long term disability insurance and purchasing the appropriate policy. If you wait until you are disabled, it is too late to plan for that rainy day.
If you need to file for long term disability insurance benefits, contact us at Nelson Boyd at (206) 971-7601. We have years of experience with cases like yours and we can help.
