The Importance of Knowing What Kind of Disability Coverage You Have

If you work for a company, no matter how small, you MAY have disability insurance that will pay a portion of your salary should you become unable to work.

If you don’t already know, you should ask your employer whether you have such coverage as it may come in handy in a time of need. If covered, you should request a copy of your short-term disability (STD) and/or long-term disability (LTD) Policy. You never know when you’ll need it.

Once you get a copy of the policy, review it and note some of these important provisions:

* Is there a pre-existing condition limitation?

If your disability policy contains a pre-existing limitation, and you leave work on disability prior to satisfying the required period, you likely will not be eligible for disability coverage. For example, if you saw a doctor in the months prior to being covered through your employment, you may not satisfy the pre-ex limitation. Sometimes, even if you did not see a doctor for months prior to being covered, if you took medication of any kind, you may be precluded from disability coverage.

Often, if you do have a pre-existing condition, you have to be insured for a year and a day before the policy goes into effect. Even if you leave work on disability on day 364 of your employment, with a proven serious and disabling condition, an insurer can deny you on the basis of your not having satisfied the pre-ex condition.

* What are the deadlines spelled out in the policy for making a claim, submitting an appeal, filing a lawsuit?

Thousands of people, dealing with their disabilities, may not realize that they are required to follow certain deadlines spelled out in their policies. Failure to follow these deadlines can mean your claim will not be considered, or will be summarily denied for failure to timely submit it, regardless of the reality and proof of your disability. Deadlines are often spelled out in terms of 45, 60, 90, or 180 days. PAY ATTENTION to these deadlines, as they are critical, and if you fail to meet them, you may lose all rights you otherwise would have had under the policy.

Too often people miss these deadlines by days or weeks. Even with life insurance policies, just because you may be a listed beneficiary, doesn’t mean you can’t lose your right to benefits if enough time passes. For example, if 1, 5 or 10 years go by before you make a claim for life insurance proceeds, it may be too late. These benefits aren’t necessarily guaranteed, so stay on top of claim deadlines in all insurance policies.

* How do private disability benefits work with state benefits, social security benefits and worker’s compensation benefits?

Remember, STD and LTD benefits, whether provided through your employer, or through a private policy, are independent of California state (EDD) benefits, social security benefits and worker’s compensation benefits. Just because you may have made a claim for California state disability benefits, and you receive the full year of these benefits (these benefits are limited to one year only), this does not prevent you from filing for private STD/LTD benefits. In fact, it is easy to reason that once the state benefits run out, and you’ll need a source of income, then you can make a claim for private STD/LTD benefits. It does not work this way, however, and you will miss the deadline for applying for private benefits, and lose all benefits you may have been entitled to, if you wait too long. The same is true with social security disability insurance benefits–just because you may have applied for them, or are receiving them, is no guarantee that your private insurance benefits will be paid. As for worker’s compensation benefits, these come into play if you became sick or injured on the job, and we urge you to seek the assistance of a worker’s compensation attorney who will work with you and your employer to resolve this.

The only way that all of these benefits interface, is when your private disability insurance carrier approves your STD/LTD disability claim, it can (and will) offset your private disability benefits with income you receive from other sources, including California state disability benefits, social security disability insurance benefits, and worker’s compensation benefits. Disability insurance policies contain different offset provisions, so it is important that you read this portion of your policy as well. (For example, an insurance company may reserve the right to offset with estimated benefits you’ll receive from the Social Security Administration, even if you do not in fact receive these).

Do explore all options: look into applying for STD, LTD, California state disability, social security disability insurance, and – if applicable – worker’s compensation benefits.

If you have any questions, or would like a free consultation, contact Kantor & Kantor, we can help.

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