Social Security Disability vs. Long Term Disability Insurance: 755,000 reasons why the latter may be better
December 10, 2007
755,000 reasons why you can’t rely on Uncle Sam.....
755,000! No, that’s not the amount of money Alex Rodriguez makes per home run. It’s actually the number of backlogged cases in the U.S. Social Security Disability system. A recent article by the New York Times reports that it can take as long as three years for an appellate decision in a Social Security Disability Income (SSDI) case.
Why this unconscionable backlog? Every year, more appeals are filed than the country's 1,025 appellate judges have the capacity to handle, even working overtime. When Congress proposed a budget item seeking $100 million to add more judges to issue more timely rulings, President Bush vetoed the bill calling it "profligate."
Every American with a disability waiting for an SSDI appellate decision (and likely anyone else who can reason) could tell the President the real meaning of "profligate": Spending $177 MILLION A DAY on the war in Iraq.
How does the President's veto affect you? It means that having your long-term disability insurance claim handled quickly and effectively is more important than ever. All too often, I get a call about an LTD claim from someone who has waited a year or more to take action. In the typical call, the policyholder denied insurance coverage was confident he or she would receive SSDI, only to find that Social Security denied them as well and their day in court won’t be coming for a LONG, LONG time. That's when I have to break the sad news that the deadline for appeal has already passed or the statute of limitations (the amount of time you have to take legal action) has already run out. Unlike SSDI, which has no statute of limitations, LTD policies must be litigated within four years of the date proof of loss is required, and in some cases it can be as short as one year.
The time to take action against your insurance company is immediately after coverage is denied! Delay and you could find yourself standing behind 755,000 other claimants in a line not going anywhere fast.